Trade Cancelled: 2010-09-24 00:55

Bahhh! As it turns out, we did get a break of the symmetrical triangle. The only problem is it broke the other way! EURCHF fell about 150 pips to find support at this week's low after the euro zone sounded the alarms with its disappointing PMI data. Risk aversion took control of the pair as investors traded in their euros for francs out of fear of an economic slowdown.

Since my trade idea has been invalidated, I'm bailing out on this and canceling my buy order.

Oh well... It's better to come out unscathed than to leave this trade bleeding, right?

Trade Idea: 2010-09-23 00:34

While I was busy polishing the horn on my head, I took a peek at the charts. Bam! My lone eye widened when I saw what looks like a symmetrical triangle forming on EURCHF. It's time to shift gears and get on this euro bandwagon!

The pair has been moving skyward since last week. But even though it maxed out at around 1.3400 last week and dropped, it's still trending higher. Check out that rising trend line I drew and you'll see what I mean!

I'm expecting a bit of resistance near 1.3270 since price stalled there yesterday, so I'm setting my buy order just beyond that. As a symmetrical triangle is a continuation pattern, I'm gonna be playing the breakout. I'm hoping to score a touchdown somewhere near last week's high point. But if things go awry, I'm exiting near today's low. I think this should give my trade enough withstand any choppy moves we may see later today.

Of course, for any breakout, there must be a catalyst. This past week, the euro has been on an absolute tear, as it's been posting new highs across the board. It's benefitted from the good results of Ireland and Portgual's bond auctions. The question is whether euro bulls can sustain this momentum. We may get our answer later today, once PMI reports from the euro zone are released today. Experts don't believe that we'll see much of a difference from the previous month's results but hey, given how well the euro has been doing recently, who knows right?

In any case, I'm going to be taking a directional bias on this trade and be ready just in case these reports do spark another run of optimism for the euro. Once again, here's my gameplan:

Long EURCHF at 1.3285, stop at 1.3205, TP at 1.3385.

That's all for now. Time to hop on the couch, turn on the DVR and watch a replay of that Saints-49ers game. Didn't get to catch my boy Drew Brees in action!