EUR/USD: Going Long on the Breakout

Trade Idea: 2011-10-13 1:38

EUR/USD 1-Hour Chart

I’ve gotten burned countless times for going against the trend so this time, I’m just gonna go with the flow. Looking at the charts, we see that EUR/USD is on an uptrend as proven by the higher highs and higher lows it’s been making.

The pair is just consolidating around at 1.3800 handle now, so my plan is to wait for it to make a new high around 1.3840 before going long. I would then set my stop below the consolidation area at 1.3750.

As for the fundamentals, it seems that optimism is picking up. For one, Slovakia’s political parties have finally reached a deal with regard to the European Financial Stability Facility (EFSF) expansion yesterday after they had rejected earlier. This led to a wide-reaching risk rally in high-yielding currencies, with the euro at the forefront of the pack.

The only tier 1 report scheduled to be released today is the U.S. trade balance. The market is expecting a 46 billion USD deficit, but if the actual figure misses forecast, we could see a breakout!

So, based on the technicals and fundamentals, I’m going to go long once it breaks out to the upside. Here’s my plan again:

Buy EUR/USD at 1.3840, SL at 1.3750, PT to be determined. I will risk 1% of my account.

Let’s go bulls! I hope ya’ll have some steam left!

XOXO,

Huck

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  • Jim Peay

    Tonight’s your night.  I’m thinking like you though I’m getting in if at 1.3835.

    • huck

      Hope you were able to take advantage. It made a new high.. You should’ve gotten a lot of pips! Congrats.

  • Aquso

    Hi Huck,

    You are actually counter trend trading if you are going long at this stage, daily chart is in a down trend. Good luck.

  • Kumar

    Hi Huck,

    This is not only counter trend, but 3840 is a .5 Fib resistance level/agreement region and the market is more likely to show some hesitation to go up. I would not enter long at this level. But if you are looking for a buy breakout anyway, maybe watching for bullish signs on hourly and going long some place above 3840 would be a good entry point. Also, the stop loss is too tight based on daily volatility. Just my 2 cents.

    Thanks,

    Kumar