Pick of the Day: EUR/USD – Close Trade

Close Trade: 2009-03-27 06:50

Good morning! With the end of the trading week quickly approaching, and a nice little pop in the Greenback, I have decided to close my trade to avoid any event risk.

Close trade at market (1.3390)

Total: +210 pips/ +0.84% gain

Not a bad way to end the week, and it’s always a good idea to avoid closed market risk, especially with how choppy price action is nowadays. Plus you never know when some official will throw out a comment that will scare traders silly. Hehe!

So, I am still short bias and will probably re-enter short EUR/USD again at some point. For now, stay tuned and have a great weekend!

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Trade Update: 2009-03-25 21:15

Good evening! So, I guess US Treasury Secretary Geithner is the man as one comment from him about currencies makes traders go wild! Apparently, the news of the day for the Greenback wasn’t an increase in new home sales or durable goods, but comments from Geithner on People’s Bank of China Governor Zhou Xiaochuan’s call for a new international reserve currency. While he did not read the proposal, he still commented, “we’re actually quite open to that.” This sent the US Dollar falling against the majors – EUR/USD rallied 150 pips 10 minutes after his comments. This brought the market up to my entry orders at 1.3600, where I entered my short position.

I’m in my short position and luckily for long US Dollar holders, Geithner back tracked on his statement by saying, “I think the dollar remains the world’s dominant reserve currency.” and that a “strong dollar” is in “America’s interest.” That stabilized the market a bit, but still leaves us all in a bit of uncertainty of where the next focus will be.

So, I will continue to hold for now on my short euro bias and that the US markets are still considered the safest place – for now.

We have got US gross domestic product and personal consumption expenditure data coming up. Of course, we all expect bad data, but any good news may provide a short term boost to the Greenback and risk tolerance. Stay tuned for updates and adjustments!

Trade Idea: 2009-03-24 10:47

PoD Chart

Good morning! What a wild ride it has been in the markets the past week as we not only get the Fed to throw billions at the credit crisis, but now the Treasury is getting in on the action too! The US Treasury unveiled their own plan to unload toxic assets and include private investors in the healing process. This has cause a massive outflow out of the US Dollar and back into commodities and equities as traders take on a bit more risk.

Now here are my questions. Will this bring us out of the global recession? Even if credit did become freely available, will US consumers resume their OVER spending habits of before – especially if millions have been laid off? And if the US doesn’t resume its crazy spending, then how will the rest of the world survive without the US’s appetite to consume their exports?

I’m thinking there isn’t a quick fix to any of these questions, and while the moves from the US government is a great confidence boost, this rally we are experiencing may be short lived as the world’s focus on US Dollar weakness returns to global weakness. And as we shift focus away from recent news, I look for focus to shift to the Eurozone. I believe they are in their own deep recession, their own banking instability issues, and that the ECB may be a bit slow to react with their own interest rate cuts. I think they may eventually cut to spark growth and if they do bring rates down to near zero, then that removes their interest rate advantage for their currency. Basically, I think if the Eurozone can’t find solutions soon, the euro may fall against the US Dollar and test the previous bottom.

On the daily chart, we can see the rally sparked by the Fed’s plan to buy US Treasuries and yesterday’s US Treasury plan. It looks like the rally has stalled within the Fibonacci retracement zone and price action is consolidating at the moment. Stochastics are also indicating that buyers have run out of steam and that we may see a return of sellers.

I look to do a simple fibonacci short play, but because this is on a higher time frame my stop will be large (almost 2 time the daily range) and my targets will be huge as well. I expect to be in this one for quite some time. Here’s what I am going to do:

Short EUR/USD at 1.3600, stop at 1.3850, pt1 at 1.3450, pt2 at 1.3000

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

We do have quite a bit of news this week coming from both the Eurozone and the US. Most notably is German IFO business and CPI data from Eurozone, and durable goods, GDP, and consumer confidence data from the US. This means we may see a bit of volatility in the next few days. Be prepared and trade safe. Stay tuned and good luck!

  • Babysteps

    I OPen short yesterday @1.3650 but sl was 1.3670 and it go to 1.3677 then drop grrrr.
    any way i just come back from my work and already open same trade with u but my tp1 1.3330
    Good luck to all

  • businessman78

    I’m with you on this one. But I was in 1.35531
    and placed my stop on 1.37000 and I will follow all the way to 1.30000 HOPEFULLY!!

  • MonsterTrader

    too big for me, I’ve stopped these hardcore long trades! I’m more in and out – turn on the $$$ machine and watch her run……..weelllll almost ;) I broke even today :P

  • bilal_shirazi

    Has this triggered?

  • julian

    ok, as always i will give it a shot.. She`s at 1.3513 as of 2.10pm today. Now no doubt engin will post a comment soon saying that we should wait for a better price. And to be fair, so far he has been pretty much spot on. However there will come a day when that will make us miss the boat, so i`ll place a few small positions, some at pipcrawlers 136 and some at a better price..if it comes. Goodluck everyone

  • julian

    no bilal..not yet

  • Babysteps

    I OPen short yesterday @1.3650 but sl was 1.3670 and it go to 1.3677 then drop grrrr.
    any way i just come back from my work and already open same trade with u but my tp1 1.3330
    Good luck to all

  • Helltopia

    Currently trading at 1.34416. I jumped in at 1.358ish after it broke the support line (did you see that one?) and made a nice 100 pips already. Now I see the Crawlers post about it as well, so I keep my second lot running… worst case its a B/E for me now :)

  • devyshka

    First target hit! Very nice PipCrawler. I have left my last lot for the final run. Let’s see how it goes! Thanks for your analysis.

  • Babysteps

    Pip Thank,
    1- happy because my analysis Agree with yours
    2- Will mean to me alot if you could notice my post and tell me if my level geting bad or better.
    3- still think we might go up, watching 1.3330

  • tazmaniak

    Pip, my 1st msg. I have been following your system for a while now. Really nice analyses! Hope to learn more by participating in your blog.

  • businessman78

    I’m with you on this one. But I was in 1.35531
    and placed my stop on 1.37000 and I will follow all the way to 1.30000 HOPEFULLY!!

  • MonsterTrader

    too big for me, I’ve stopped these hardcore long trades! I’m more in and out – turn on the $$$ machine and watch her run……..weelllll almost ;) I broke even today :P

  • bilal_shirazi

    Has this triggered?

  • julian

    ok, as always i will give it a shot.. She`s at 1.3513 as of 2.10pm today. Now no doubt engin will post a comment soon saying that we should wait for a better price. And to be fair, so far he has been pretty much spot on. However there will come a day when that will make us miss the boat, so i`ll place a few small positions, some at pipcrawlers 136 and some at a better price..if it comes. Goodluck everyone

  • julian

    no bilal..not yet

  • Helltopia

    Currently trading at 1.34416. I jumped in at 1.358ish after it broke the support line (did you see that one?) and made a nice 100 pips already. Now I see the Crawlers post about it as well, so I keep my second lot running… worst case its a B/E for me now :)

  • julian

    devyshka,, correct me if im wrong but this trade has not yet triggered. it was posted this morning at close to 11am this morning and has not hit 136 since then .

  • devyshka

    First target hit! Very nice PipCrawler. I have left my last lot for the final run. Let’s see how it goes! Thanks for your analysis.

  • Babysteps

    Pip Thank,
    1- happy because my analysis Agree with yours
    2- Will mean to me alot if you could notice my post and tell me if my level geting bad or better.
    3- still think we might go up, watching 1.3330

  • AlZheimer

    Thanks PC: don’t usually look at this pair[ however, always read your blog) and took a look.Since Mar 19 the 200 ema has been resistance and until this p.m. ,$ was outside the upper BB. STO 8 as noted by you is O/B and -ve divergence on STO from 13-20 Mar.Combined with your fib analysis, the probabilty is high (IMHO).

  • tazmaniak

    Pip, my 1st msg. I have been following your system for a while now. Really nice analyses! Hope to learn more by participating in your blog.

  • devyshka

    Julian, I think this trade has already executed. When he posted the blog, I read it about 30 minutes or so later and got in. My first lot has already hit target and the last one is currently up 100+ pips.

  • Pipcrawler

    Good evening everyone! thanks for the comments and posting your own analysis! Unfortunately, the market has yet to move up to my entry orders since I posted. So, this trade may not trigger, but on a day trade basis, I may enter a short around 1.3550 to grab some quick pips. Stay tuned!

  • julian

    devyshka,, correct me if im wrong but this trade has not yet triggered. it was posted this morning at close to 11am this morning and has not hit 136 since then .

  • AlZheimer

    Thanks PC: don’t usually look at this pair[ however, always read your blog) and took a look.Since Mar 19 the 200 ema has been resistance and until this p.m. ,$ was outside the upper BB. STO 8 as noted by you is O/B and -ve divergence on STO from 13-20 Mar.Combined with your fib analysis, the probabilty is high (IMHO).

  • devyshka

    Julian, I think this trade has already executed. When he posted the blog, I read it about 30 minutes or so later and got in. My first lot has already hit target and the last one is currently up 100+ pips.

  • Pipcrawler

    Good evening everyone! thanks for the comments and posting your own analysis! Unfortunately, the market has yet to move up to my entry orders since I posted. So, this trade may not trigger, but on a day trade basis, I may enter a short around 1.3550 to grab some quick pips. Stay tuned!

  • devyshka

    Julian, it looks like I was wrong on the entry timing. But I will sure keep the 100+ pips that I have already made…hee-hee!

  • engin

    no julian its a good trading for you but i just missed 1.3730 now i will look if it reach 1.3577 or 1.36 again then maybe i will be with you but i must say 1.30 is iimmppoossiibbllee….

    my pts will be 1.3321 and maybe 1.32 but if it breaks 1.32 last target is will be 1.3117 but i dont think so

    i have one long position already @1.2460
    and i am expecting price will shoot 1.40 even 1.4180

  • devyshka

    Julian, it looks like I was wrong on the entry timing. But I will sure keep the 100+ pips that I have already made…hee-hee!

  • engin

    be carefull its going 1.3735 again if it cannot hold the price then targets will be 1.3824 and 1.3940

  • engin

    no julian its a good trading for you but i just missed 1.3730 now i will look if it reach 1.3577 or 1.36 again then maybe i will be with you but i must say 1.30 is iimmppoossiibbllee….

    my pts will be 1.3321 and maybe 1.32 but if it breaks 1.32 last target is will be 1.3117 but i dont think so

    i have one long position already @1.2460
    and i am expecting price will shoot 1.40 even 1.4180

  • engin

    be carefull its going 1.3735 again if it cannot hold the price then targets will be 1.3824 and 1.3940

  • julian

    engin, i can not see where you missed 137.30 on eur/usd. on my chart the highest its reached so far today is 136.49 ??? again please correct me if im wrong

  • julian

    this trade hit entry point (136.00) around 10am this morning. so this trade is now live…

  • julian

    engin, i can not see where you missed 137.30 on eur/usd. on my chart the highest its reached so far today is 136.49 ??? again please correct me if im wrong

  • julian

    this trade hit entry point (136.00) around 10am this morning. so this trade is now live…

  • engin

    be carefull its rolling reverse head and shoulders if it drops 1.3492-1.35 and if it hold price then it can test 1.3735 again i will go long @ 1.35

  • engin

    be carefull its rolling reverse head and shoulders if it drops 1.3492-1.35 and if it hold price then it can test 1.3735 again i will go long @ 1.35

  • chady250

    Im going along with this trade too! 1.3605 same SL and TP

  • chady250

    Im going along with this trade too! 1.3605 same SL and TP

  • engin

    bad news for eurozone good news for you now i will be with you

  • Babysteps

    Close my position my TP hit as i mention above 1.3330

  • engin

    bad news for eurozone good news for you now i will be with you

  • Babysteps

    Close my position my TP hit as i mention above 1.3330

  • devyshka

    I was able to grab +261 pips from this trade. Thanks, Pip Crawler!

  • devyshka

    I was able to grab +261 pips from this trade. Thanks, Pip Crawler!

  • chady250

    Closed at 1.3450 Nice 155 pip Profit

  • chady250

    Closed at 1.3450 Nice 155 pip Profit