Trade Update: November 12, 2013 | 4:50 am
I guess it’s just not meant to be! Last week Draghi and his team surprised the markets with a 25 basis point interest rate cut. Not only that, but he also jawboned a bit and hinted at more “downside risks!” Not surprisingly, EUR/USD fell like there’s no tomorrow. It broke below the 1.3500 handle that we were watching and only encountered support around the 100 SMA.
This is why I’m holding off from my long EUR/USD bias for now. I know that the oversold Stochastic, 100 SMA, and 61.8% Fib support are still valid, but I think that the ECB’s dovish tone and the Fed’s lack of conviction to delay tapering are reason enough to not force a long trade. Maybe if the market themes change and there are tempting bullish candlesticks?
That’s it for me today! All this talk is making me think of reversing my bias. I’ll let you know if I find a good setup!
Trade Idea: November 6, 2013 | 3:50 am
Found a good setup this week! EUR/USD’s 1.3500 psychological handle is holding like a boss on the daily chart and Stochastic is also showing a possible bullish divergence. Oh, and I’m also seeing a possible trend line support!
As cool as the possible risk ratio on this trade is though, I’m not too excited over entering at market. For one thing, the ECB interest rate decision is only a day away. And if the recent ECB officials’ speeches are to be believed, then we might hear plans for more ECB stimulus.
For now I’ll just watch the pair and wait for opportunities to enter around the ECB decision. I might jump in and risk 0.5% of my account if it breaks above this week’s highs or if it breaks below the rising trend line. Of course, I’ll also have to keep in mind that any move might not be sustained until the end of the week since we could see profit-taking ahead of the U.S. NFP report.
What do you think of my plans? Any suggestion is welcome!
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