Pick of the Day: EUR/USD – Trade Closed

Trade Closed: 2009-01-26 11:35

It’s a new week, and for a second it looks like the markets were back to Euro selling as EUR/USD markets opened up and fell back below 1.29. However, it didn’t manage to hold as the Euro rallied across the board. This is probably a short term reaction to news that Barclays Plc won’t need further capital increases.

The stop on my remaining position was hit and closed my remaining short position out at 1.3050.

1st Half: +250 pips
2nd Half: +00 pips
Total: +0.50% gain

So, unexpected news took me out of my trade, but that’s how the game goes. This week should be another action packed week with Consumer Confidence and Case-Shiller Home Price Index tomorrow, and on Wednesday we’ll get the Fed’s rate decision. With rates so close to zero, we probably won’t see any further cuts by the FOMC. After that we have Jobless Claims, New Home Sales, and Durable Goods on Thursday and GDP on Friday. I have this funny feeling that GDP is really going to disappoint. My question is will it get priced in ahead of time? We’ll have to wait and see. For now, I will continue to watch EUR/USD and see if we get any resistance at the previous swing high around 1.33 – 1.34. Stay tuned!

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Trade Adjustment: 2009-01-23 14:15

It looks like more risk aversion pushed EUR/USD further down this morning after we saw more weak data from the Eurozone. EUR/USD did hit my first profit target at 1.2800, hitting lows are 1.2770, where half of my position was close to lock in profits. The following adjustments were made:

Closed half position at 1.2800 to lock in profits. Adjust stop on remaining position to breakeven (1.3050) to create a risk free trade.

The Euro did rally at the end of the Euro/US session overlap – probably due to profit taking as we close out the week. I continue to hold my position into the weekend as I am still short-to-medium term bearish on this pair. Let’s see if 1.3000 is the magic resistance number in the upcoming week. Have a great weekend!

Trade Update: 2009-01-22 14:45

Hey! Just wanted to post a quick update on my trade. EUR/USD rallied a bit higher since my original post, hitting a high around 1.3090 before sellers pushed the pair back below 1.3000. My short orders at 1.3050 were triggered and I entered my trade.

Since then, the pair hasn’t really gone far in either direction and has made a low around 1.2910. This could be on the account of mixed of US data this morning, with better than expected unemployment claims and worse than expected housing data. I’m going to stick with the downtrend for now and that we may see more selling in EUR/USD on possible rate cuts to come from the ECB. it looks like this trade may take a while to play out.

I will continue to hold this position until my exit points have been hit or there is a change in market sentiment/environment. Stay tuned for updates and adjustments!

Trade Idea: 2009-01-21 01:26

PoD Chart

What’s up Forex fanatics! EUR/USD has been in a downtrend for a while, and it looks like I may have a chance to jump into the downtrend at a better price. The pair looks like it is taking a breather as it rallies. Time to sell the rally? Maybe so? Let’s take a look!

Technically, I have a four hour chart, and we can see the pair retracing higher during its current downward move at the moment. Using the Fibonacci tool, I have picked out a possible resistance area in between the 38% and 61% Fibonacci retracement levels. Stochastics are showing oversold, so we may see buyers push the pair higher to more attractive sell prices.

Fundamentally, it appears that market players are back into ‘risk aversion’ mode as higher-yielding currencies are falling to their lower-yielding buddies. Global recession is still the main focus and traders think that we will continue to see selling out of assets like commodities, equities, and high-yielding currencies for some time. It makes sense as it looks like some of the developed countries, or areas like the Eurozone, appear to be behind the curve in fighting economic slowdown. Look for more and more countries follow the US in fighting recessions with further interest rate cuts.

So, it is a basic technical setup with a short at the Fibonacci retracement levels. I will have a wide stop of about 250 pips – the daily range of EUR/USD. Here’s what I’m going to do:

Short EUR/USD at 1.3050, stop at 1.3300, pt1 at 1.2800, pt2 at 1.2550

Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly.

In the upcoming list of calendar events, the big event is probably ECB President Trichet’s testimony to the European Parliament later today. His comments will be closely watched for hints on the next move from the European Central Bank. Stay tuned and good luck in your own trading endeavors!

  • kliopp

    I’m with you in this trade>

  • Nakamura

    Nice Trade. Didn`t know babypips.com has a chatroom. Nice work!

  • therbcoe

    Hi Pip Crawler,

    What are the settings on your 4hr Stochastics?
    Thanks

  • barrooo

    I didn’t know babypips had a chatroom either, does anyone ever go in there?

  • nemoz

    did this trade execute already?

  • kliopp

    I’m with you in this trade>

  • geogi

    No, nemoz, this trade is not execute yet.

  • Nakamura

    Nice Trade. Didn`t know babypips.com has a chatroom. Nice work!

  • therbcoe

    Hi Pip Crawler,

    What are the settings on your 4hr Stochastics?

    Thanks

  • bookmoon1

    EU Fly or what ?

  • barrooo

    I didn’t know babypips had a chatroom either, does anyone ever go in there?

  • Helltopia

    So whats UP with the E/U today? Has the Obama effect done its majic here as well? Currently at -120 pips on this one, someone jump at it so it goes back down!

  • nemoz

    did this trade execute already?

  • thegolfman3

    if your -120 on this where did you sell in this pair cause it wasnt at 1.3050

  • geogi

    No, nemoz, this trade is not execute yet.

  • bookmoon1

    EU Fly or what ?

  • bookmoon1

    it was in 1.3050 and It down now >> I hope It cuntiniu

  • Helltopia

    So whats UP with the E/U today? Has the Obama effect done its majic here as well? Currently at -120 pips on this one, someone jump at it so it goes back down!

  • thegolfman3

    if your -120 on this where did you sell in this pair cause it wasnt at 1.3050

  • Pipcrawler

    Thanks for the comments everyone! Yeah, we do have a chatroom! I haven’t been in a while, but I do try to make it in there during the European and US trading session overlap…check it out! Looks like 1.3050 was a good entry point…let’s see what happens!

  • erod84

    Pipcrawler,

    Looked like a good short term trade. I wouldn’t count on any drops further though. I can see it building some bullish patterns, and i really think we will need some strong upside buying to at least 1.33

  • bookmoon1

    it was in 1.3050 and It down now >> I hope It cuntiniu

  • Pipcrawler

    Thanks for the comments everyone! Yeah, we do have a chatroom! I haven’t been in a while, but I do try to make it in there during the European and US trading session overlap…check it out! Looks like 1.3050 was a good entry point…let’s see what happens!

  • erod84

    Pipcrawler,

    Looked like a good short term trade. I wouldn’t count on any drops further though. I can see it building some bullish patterns, and i really think we will need some strong upside buying to at least 1.33

  • volodja

    Dear Pipcrawler, I have some questions concerning your current trade.
    1. Why did you decide EURUSD would fall again? Are the reasong the same as in one of your previous posts?
    2. Why did you decide to short at 1.3050? (Yes, you wanted to short in the area between 38% and 61% Fibonacci retracement levels. But why exactly this number?)
    3. Why did you place your stop at 1.3300, not at the previous local maximum of 1.3386? Was it due to your money management rules?

  • volodja

    Dear Pipcrawler, I have some questions concerning your current trade.
    1. Why did you decide EURUSD would fall again? Are the reasong the same as in one of your previous posts?
    2. Why did you decide to short at 1.3050? (Yes, you wanted to short in the area between 38% and 61% Fibonacci retracement levels. But why exactly this number?)
    3. Why did you place your stop at 1.3300, not at the previous local maximum of 1.3386? Was it due to your money management rules?

  • enochbenjamin

    my desired entry was 1.3090 (basic resistance) – but my brokers high was 3087 (while I slept) so I missed it!

  • hellkkas

    I dont short until 1.3250

  • enochbenjamin

    my desired entry was 1.3090 (basic resistance) – but my brokers high was 3087 (while I slept) so I missed it!

  • hellkkas

    I dont short until 1.3250

  • bookmoon1

    EU ‘ll be in 1.2500 i hope :)

  • pipsprof.

    Hello,everybody, I already hit my target of 250pips this morning and am out before any heartache,hope u guys lock in some profit too.Pipscrawler,thanks for that great trade idea, u are simply good, and I hereby confer on you the honorary title of pips GRANDMASTER in my PIPSCITY,Please post us another great trade analysis as i am already out of this. Thank u once again.

  • bookmoon1

    EU ‘ll be in 1.2500 i hope :)

  • pipsprof.

    Hello,everybody, I already hit my target of 250pips this morning and am out before any heartache,hope u guys lock in some profit too.Pipscrawler,thanks for that great trade idea, u are simply good, and I hereby confer on you the honorary title of pips GRANDMASTER in my PIPSCITY,Please post us another great trade analysis as i am already out of this. Thank u once again.

  • bookmoon1

    what happned To EU ?????????????????

  • pipsprof.

    bookmoon1, I envisaged profit taking going to the weekend and could not risk holding on to that trade for obvious reasons, buyers pushed the pair as far as 1.3035 during the new york session,and the adjusted stoploss was almost hit, a bird in hand is worth a thousand in the jungle,so guys,I just might jump back on this trade on monday nextweek,have a pleasant weekend everybody.

  • bookmoon1

    what happned To EU ?????????????????

  • pipsprof.

    bookmoon1, I envisaged profit taking going to the weekend and could not risk holding on to that trade for obvious reasons, buyers pushed the pair as far as 1.3035 during the new york session,and the adjusted stoploss was almost hit, a bird in hand is worth a thousand in the jungle,so guys,I just might jump back on this trade on monday nextweek,have a pleasant weekend everybody.