A Case of Déjà vu on EUR/USD! – Trade Closed

Trade Closed: 2011-4-13 1:23

EUR/USD 1-hour Chart

Oh man, there really is just no stopping the euro!

Shortly after buying EUR/USD around the 38.2% Fibonacci level (1.4400), I had braced myself for the pair to fall. I thought that the disappointing figures from the the ZEW sentiment reports for Germany and the euro zone coming would send the euro lower.

But thankfully, the bulls proved to be too strong and the 38.2% Fib held. From then on, the pair just climbed all the way to my profit target at the 1.4500 handle.

Closed trade at 1.4500: +100 pips / +0.5%

While the trade was a good one, the reward-to-risk ratio was merely 1:1. If I really want to rake in the pips, I have got to be more aggressive. Can’t wait for a new trend trade to appear… I’ll be surely looking to milk it for all its worth!

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Trade Idea: 2011-4-12 3:37

EUR/USD 1-hour Chart

I felt butterflies in my stomach almost as soon as I saw another potential Fib play on EUR/USD. Gosh! For a moment I even thought Adam Levine was singing me the Hallelujah Chorus. Ha!

To be perfectly honest though, I’m not exactly sure if fundamentals are still in the euro’s favor. Last week, interest rate hike expectations drove the shared currency higher and allowed me to take profit on my EUR/USD trade.

But now that the the ECB has made its decision and raised the official cash rate by 25 basis points, I think I will have to keep my fingers crossed for the upcoming reports from the euro zone.

In a little while we’re gonna have Germany’s ZEW Economic Sentiment report for April. Since the German economy has been kickin’ butt like Chuck Norris, I wouldn’t be surprised to see the actual figure come in higher than the 11.7 forecast. If it doesn’t, I guess I’ll have another opportunity buy EUR/USD at a cheaper price!

On the technical side of things, we can see that price is currently in my desired buy zone – the area between the 38.2% and 61.8% Fibonacci retracement levels. Since the Stochastic shows that the pair is already oversold and price has stalled at the 38.2% Fib, I think going long at market is a good idea.

I’m not an expert at entering where price will exactly reverse, so I’m going to use a strategy called “Scaling.” This means that if price continues to fall down, I’m going to buy again at 61.8%. To give my trade enough room to breathe, I have placed my stop just below the last Thursday’s high at 1.4300.

So basically my game plan is this:

Entered at market (1.4400), stop loss at 1.4300, profit target at 1.4500, and I risked 0.5% of my account. I may buy again somewhere between the 38.2% Fib (1.4390) and 61.8% Fib (1.4330).

Alright! As I promised on Twitter, I shared to you my trade idea for today. How about you? What’s your take on EUR/USD?

  • thepipmonster

    well thought out trading plan, we are on the same school of thought on this one!

  • Packygee

    did you lock some pips in yet? wish i was awake for that one…

  • Londoner

    The Euro went up again this morning but is now encountering resistance at about 1.44480. I managed to get a few pips this morning early doors but I’ll now sit this out to see whether it breaks through last week’s highs and maybe pile in if it does.

  • 6505341124

    congrat! 2 consecutive win with 1 breakeven for this pair. You could have 3 straight win had you stuck to your original stop loss for the breakeven trade. Trend is your friend!

  • thepipmonster

    well thought out trading plan, we are on the same school of thought on this one!

  • Packygee

    did you lock some pips in yet? wish i was awake for that one…

  • Londoner

    The Euro went up again this morning but is now encountering resistance at about 1.44480. I managed to get a few pips this morning early doors but I’ll now sit this out to see whether it breaks through last week’s highs and maybe pile in if it does.

  • 6505341124

    congrat! 2 consecutive win with 1 breakeven for this pair. You could have 3 straight win had you stuck to your original stop loss for the breakeven trade. Trend is your friend!

  • Huck

    Thanks for all the comments guys! It already hit my profit target. Yippee!! I’ll update this trade later. :) XOXO

  • Huck

    Thanks for all the comments guys! It already hit my profit target. Yippee!! I’ll update this trade later. :) XOXO