Will Short-term Support Hold on EURUSD? – Close Trade

Close Trade: 2010-04-26 02:16

PoD Chart

Good morning Forex friends! Looks like I caught a bit of luck last week as EURUSD crept within two pips of hitting a 1.32 bid before rallying furiously on Friday and bringing me to profitable territory! Since I’m one to “never look a gift horse in the mouth,” I’ve decided to lock in profits ahead of the busy forex calendar.

Close long EURUSD position at 1.3363.

Total: +63 pips/ +0.63% gain

With three interest rate decisions, inflation data, GDP data, it is quite a bit more difficult to gauge market direction as it could turn on a dime with every top tier report release.

So, it’s a prudent move to close it all out and depending on what we see as far as data releases, I may re-enter EURUSD on another good technical setup. Until then, be very careful when executing trades during these top data releases to avoid slippage and whipsaws. Remember that traders are risk managers first!

Thanks for checking out my blog and the “colorful” comments below! haha! Good luck and good trading!

Trade Idea: 2010-04-22 07:02

PoD Chart

Good morning Forex friends! It looks like a short term support play is forming on EURUSD as the pair approaches the previously tested 1.3300 area. Will it hold or fold under the current fundamental picture?

On the four hour chart of EURUSD, we can see that 1.3300 held recently and looks to be tested once again. Besides the potential of a triple bottom formation, we can also see bullish divergence forming as the pair makes lower “lows,” while the stochastics’ “lows” are starting to move higher. This is a bullish signal that the pair may potentially move higher, but because divergence tends to be a very, very early indicator, I think the pair will move low enough to retest 1.3300 before popping higher.

Fundamentally, we got news this morning that the expectations of Greece’s deficit was revised up to 13.6% of GDP from 12.9%. The euro immediately sold off against the Greenback and the Japanese Yen, and I think this is the catalyst that will push EURUSD down to that 1.3300 area. The question now is, “how much money will traders commit to shorting the euro on this new development and will it be enough to break past the support level?” We will just have to wait and see…

For now, I am going to put in orders to buy at 1.3300. My stop will be around the daily average true range of 107 pips, and my profit target will be around two times my stop for a reward-to-risk ratio of about 2-to-1. Here’s what I am going to do:

Long EURUSD at 1.3300, stop at 1.3200, profit target at 1.3500

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

Stay tuned as I may cut this trade short before the weekend by closing out or taking some of my position off the table. Also, we have plenty of economic data coming up in Friday’s forex calendar, so any significant changes to the economic picture may warrant position adjustments as well.

Thanks for checking out my blog, good luck, and good trading!

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  • nancyboxer

    Watched your idea, waited, it got close to 13200, then I jumped in long @ 13235. Your trade plans are on target. Thank you for posting for us.

  • nancyboxer

    Watched your idea, waited, it got close to 13200, then I jumped in long @ 13235. Your trade plans are on target. Thank you for posting for us.

  • Viper5

    Wow your ass got saved by a couple pips…Nice one

  • Viper5

    Wow your ass got saved by a couple pips…Nice one

  • wanelad

    Only just found this, I jumped in on Friday too using the Monthly support line

  • wanelad

    Only just found this, I jumped in on Friday too using the Monthly support line

  • MedicalChew

    Funny, I got my ass got shaved off when it failed to hit 1.32 by 2 pips =_=

  • MedicalChew

    Funny, I got my ass got shaved off when it failed to hit 1.32 by 2 pips =_=