Trade Idea: 2011-9-1 3:19
As you can see, it appears that EUR/USD just bounced from major support around the 1.4360 region. With the price and the Stochastic showing a bullish divergence, I suspect we may see a stronger move up!
But of course, we never really know when these things will truly turn so I decided to split my full position into two bite size pieces. The first long order will be at market and the other one will be placed much lower, somewhere around the previous week low.
For my trade invalidation point, I have placed it below the 1.4300 major psychological level. I think 90 pips will give my trade enough room to breathe.
Fundamentally, the euro got sold off yesterday on rumors that a third bailout could be in the works for Greece. However, I think that with the NFP report due to be released tomorrow, we could see the dollar weaken as traders reduce their risk ahead of the much-anticipated jobs report.
If the employment data fails to impress investors, we may see the dollar get sold off. I’m willing to bet my new MAC Wonder Woman collection that a negative NFP report would spur talks of QE3. Of course, the market could react in two ways. Either risk aversion would come into play and the dollar would rally OR fundamentals could dictate price action. I just hope we’ll see the market return to old school fundies, for my account’s sake.
Long with half position at market (1.4370), long with the other half at 1.4330, stop loss at 1.4280, pt at 1.4500.
Keep your fingers crossed for me, will ya?