EURUSD – Looking For A Break – Trade Closed

Trade Closed: 2009-12-16 21:41

PoD Chart

Whee! My second TP got hit! I was already thinking of closing early since the EURUSD was consolidating yesterday and it seemed unable to break below minor support at 1.4505. Thanks to a relatively upbeat FOMC statement, traders bought up the dollar on the speculation that the Fed would hike rates earlier than expected.

1st Half: +130 pips / +0.55% gain
2nd Half: +280 pips / +1.17% gain
Total: +1.72% gain

It looks like dollar buying could be here to stay for the rest of the year. Although I have a feeling that this dollar run could also be a result of position traders unwinding their short positions that they had been building up throughout the year. In any case, I’m happy with my win and I’ll be looking for some more opportunities to trade before things get hectic at home with all my relatives coming home. My one-year old niece Katherine will be visiting me – she’s so cute!

Trade Update: 2009-12-13 21:59

Wootie Woot Woot! Looks like my first TP got hit! Price had actually been bouncing from my entry price several times during the week. It seems like it could be a good support turned resistance point. Fortunately for me, we saw some good data from the retail sales and consumer sentiment reports last Friday. It seems like we’re seeing a new trend develop right now – whenever stocks rise, so does the USD! This is a change from the correlation that we were seeing for most of the year.

I’m moving my stop loss to my entry price at 1.4780. This will essentially create a risk free trade. Hope this works out for me!

Trade Idea: 2009-12-7

PoD Chart

Hello there my forex friends, I’m back fresh from a rejuvenating weekend! My New Moon movie date and girls’ night out was definitely a blast! And even though I got a bit bummed out from my GBPJPY loss, I’m ready to jump back in the markets with this new short EURUSD trade idea.

Judging from the NFP-inspired greenback rally last Friday, US dollar strength could continue to dominate. Traders could continue to stock up on the greenback as the US reported only 11K in net job losses for November. Pretty shocking, right? Although it’s too early to call it a recovery for the US labor market, the drop in their unemployment rate is definitely an early holiday present for the US economy – and probably for the US dollar too!

Looking ahead, central bank leaders from both Euro zone and US are scheduled to deliver speeches today. Now, we all know how Fed Chairman Ben Bernanke has endorsed US dollar strength and how ECB President Jean-Claude Trichet supports a pro-USD stance. More jawboning from them, perhaps?

Lastly, I like this short play because it goes along with my technical analysis. Support around 1.4800-1.4820 area has been holding on strong and a break in this area could take the pair all the way down to 1.4650 and beyond. As usual, in order to control risk, I’ll be placing my stop roughly equal to the pair’s average daily pip movement.

Here’s what I’m going to do:

Short at 1.4780, pt1 at 1.4650, pt2 at 1.4500, stop at 1.4900. I’ll risk 1% of my account on this trade.

18 comments

  1. sunglow

    I am completely new to forex trading and I am trying to get a feel for it. Your trade feels right in that the tide may be turning for the dollar. But is that all it is, just a feeling? The 22 and 55 EMAs on the daily charts are still showing upward movement for the euro and only recently Ben Bernanke seemed to be indicating that he was not against a weaker dollar. It looks as though your sell order will have been triggered this morning and it will be interesting to see how it develops, going, as it does, against the long term trend. Good luck. I shall keep my eye on it.

    Reply
  2. alamoland

    As one noob to another does it ever occur to
    anyone, how does the unemployment rate go down
    when 11,000 jobs are lost? 289,000 people having
    had their benefits run out in that month is what
    happened, at least according to the ‘Bureau of
    Lying Statistics’
    How is that seen as a positive?
    Good luck.

    Reply
  3. Heston83

    @Alamoland, the rate goes “down” because its less negative than expected. Still not positive, but still higher. Kapiche?

    @Huck, Its always nice to see that your not the only one coming to a certain conclusion! I took almost this exact same trade last night. +134 pips! Yeehaw! Good luck!

    @Sunglow, Its not “just” a feeling, but rather a group of indicators which are all telling you the same thing. Once you get a set of indicators which seem best for you, you will become better at figuring out what they are trying to tell you! Its never “just” a feeling, but its always “just” an educated guess. :)

    Reply
  4. sunglow

    I am completely new to forex trading and I am trying to get a feel for it. Your trade feels right in that the tide may be turning for the dollar. But is that all it is, just a feeling? The 22 and 55 EMAs on the daily charts are still showing upward movement for the euro and only recently Ben Bernanke seemed to be indicating that he was not against a weaker dollar. It looks as though your sell order will have been triggered this morning and it will be interesting to see how it develops, going, as it does, against the long term trend. Good luck. I shall keep my eye on it.

    Reply
  5. alamoland

    As one noob to another does it ever occur to
    anyone, how does the unemployment rate go down
    when 11,000 jobs are lost? 289,000 people having
    had their benefits run out in that month is what
    happened, at least according to the ‘Bureau of
    Lying Statistics’
    How is that seen as a positive?
    Good luck.

    Reply
  6. tutor67

    Hey Hucklekiwi. I’m a fores noobie as well, but I don’t really like your set up. Please take these comments for what they’re worth, but…I agree with the solid support line but would put my entry right at or just below. I don’t really see any evidence of your stop-loss ‘backstop’ – no significant support there at all. It seems to me that there is reasonable resistance at just below the 1.47 mark which may stop your trend before your target – I would move your target to that level and take a nice gain! And a question – are you really a Kiwi?? I am trading in Auckland. Good luck!

    Reply
  7. Heston83

    @Alamoland, the rate goes “down” because its less negative than expected. Still not positive, but still higher. Kapiche?

    @Huck, Its always nice to see that your not the only one coming to a certain conclusion! I took almost this exact same trade last night. +134 pips! Yeehaw! Good luck!

    @Sunglow, Its not “just” a feeling, but rather a group of indicators which are all telling you the same thing. Once you get a set of indicators which seem best for you, you will become better at figuring out what they are trying to tell you! Its never “just” a feeling, but its always “just” an educated guess. :)

    Reply
  8. Hucklekiwi PipHuck

    @alamoland Hahaha! From my understanding, the unemployment rate only counts the number of people who are ACTIVELY looking for jobs. So if people get depressed and decide to stop looking for jobs (since there aren’t any left, anyway), the BLS removes them from the count… reducing the unemployment rate! How silly is that?

    Reply
  9. tutor67

    Hey Hucklekiwi. I’m a fores noobie as well, but I don’t really like your set up. Please take these comments for what they’re worth, but…I agree with the solid support line but would put my entry right at or just below. I don’t really see any evidence of your stop-loss ‘backstop’ – no significant support there at all. It seems to me that there is reasonable resistance at just below the 1.47 mark which may stop your trend before your target – I would move your target to that level and take a nice gain! And a question – are you really a Kiwi?? I am trading in Auckland. Good luck!

    Reply
  10. Hucklekiwi PipHuck

    @alamoland Hahaha! From my understanding, the unemployment rate only counts the number of people who are ACTIVELY looking for jobs. So if people get depressed and decide to stop looking for jobs (since there aren’t any left, anyway), the BLS removes them from the count… reducing the unemployment rate! How silly is that?

    Reply
  11. MonsterTrader

    Hey Huck looks like your trade is playing out :) I missed it bc I couldn’t get my set up but hopefully I’ll be able to get in on some retrace….usd/jpy may be setting up for a long also, so I’m keeping an eye on that guy as well…Did you hear the news about Greece? should help your trade!

    Good luck

    Reply
  12. MonsterTrader

    Hey Huck looks like your trade is playing out :) I missed it bc I couldn’t get my set up but hopefully I’ll be able to get in on some retrace….usd/jpy may be setting up for a long also, so I’m keeping an eye on that guy as well…Did you hear the news about Greece? should help your trade!

    Good luck

    Reply
  13. Skushno

    Statistics do lie. For example, regarding US unemployment, it was reported that the unemployment rate dropped to 10% from 10.2%. To get that number, they had to shrink the number of people looking for work by 98,000. Basically, if you have not looked for work in the last four weeks, you are said to be “discouraged” and are taken out of the unemployment statistics. If you add back in the discouraged workers, the rate goes up to 10.5%. And it is worse than that. If you have not looked for a job in 12 months, you are taken off the rolls altogether.

    Here is one of the reasons that the unemployment number is going to remain stubbornly high through 2010. Let’s assume a modest recovery of 3%, which is maybe enough to get jobs back into the 150,000 range. As people go back to work, that 0.5% of discouraged workers starts to look for jobs and they are now counted as unemployed. That small number of 0.5% is 750,000 people that will be (should be) added back into the unemployment numbers!

    Reply
  14. Skushno

    Statistics do lie. For example, regarding US unemployment, it was reported that the unemployment rate dropped to 10% from 10.2%. To get that number, they had to shrink the number of people looking for work by 98,000. Basically, if you have not looked for work in the last four weeks, you are said to be “discouraged” and are taken out of the unemployment statistics. If you add back in the discouraged workers, the rate goes up to 10.5%. And it is worse than that. If you have not looked for a job in 12 months, you are taken off the rolls altogether.

    Here is one of the reasons that the unemployment number is going to remain stubbornly high through 2010. Let’s assume a modest recovery of 3%, which is maybe enough to get jobs back into the 150,000 range. As people go back to work, that 0.5% of discouraged workers starts to look for jobs and they are now counted as unemployed. That small number of 0.5% is 750,000 people that will be (should be) added back into the unemployment numbers!

    Reply

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