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EUR moves down in advance of FOMC

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Once the dust settled after the US CPI economic release, the majors set up showing USD strength with the USDJPY taking one extra 15 minute candle to show the same.  The CHF was the mirror image of the EUR and  the GBP, AUD and NZD all showed similar setups.

The EUR is taken short with the 1.2400 figure and  our Target 2 coinciding.  This gave the trade a 2:1 R/R which is acceptable for us, once the US session is underway.  We move our profit stop down protecting ourselves in the event of any whipsaw.  Price moved to the 1.2400 figure before losing downside momentum.

2014-12-17 EUR

We tighten the profit stop as price is statistically unlikely to run further than our Target 2.  The FOMC is the wildcard today,but we are gone in advance of it.

There will be European and US news tomorrow.  .

Good luck with your trading!

Back tomorrow if we find a trade.

 

US traders push ranging EUR back down

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The EUR has been trading between 1.2350 and 1.2500 for over a month – with very few days above and a very few days below.  As the UK session got underway price moved up.  Our upside Target was 1.2529 for the day and as price climbed beyond it, we awaited a reversal setup – as our preference is to short this pair.  As the US traders began their day, the pair immediately reversed and an entry is found with the trend – short.

Price continued to move lower and we moved our stop loss down to plus one pip after we see a large bull candle.  The worst case scenario is we are taken out positive one pip and that’s still a winning trade!  Price continued lower before bouncing off yesterday’s high late session and we close at the low of the previous candle to lock in our gain.

2014-12-16 EUR

The main risk event for the week is the FOMC tomorrow.  Volumes are lighter going into the holiday season which means markets will be susceptible to one-off flow driven moves.

Keep your stops tight.  Over the holidays is a great time to hone your trading skills if you have some free time.

Good luck with your trading!

Back tomorrow if we find a trade.

 

AUD short – fading rallies in a downtrend is the safer setup

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Be very careful at this time of year as the market is less predictable and money flows are down. Positioning is light and we await the FOMC next Wednesday.  Next week could prove to be interesting as we approach the holidays and year end.

Keep it simple and trade with the trend – which is USD strength!  The EUR is weak and very vulnerable near 1.2500.  The commodity currencies are weak as commodity prices fall and China’s numbers soften.  The Canadian dollar is vulnerable with the current lower oil price.  The Japanese yen is weak, the EUR is weak, the Swiss want a weaker franc…

China’s industrial production y/y number missed expectations which impacts Australia.  A similar setup to yesterday with 3 lower highs was the entry signal and required a very small stop loss.  Price moved down, but lost its momentum below the Asian low – where buyers entered.  We had hoped to test yesterday’s low and get down to our target 1 at .8199 and our second target of .8181 but it didn’t happen.

I will continue to look for setups with the trend and fading any rallies of temporary USD weakness. Watch key levels and wait for the Big Boys and Girls to show you how easy it is for them to take money from weak hands.  Try to think like them and trade with them NOT against them!

Good luck with your trading!  Enjoy your weekend and happy holidays!!!

Back on Tuesday if we find a trade.

Taking the EUR short – back to trending lower.

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Fading a rally in a downtrend is an opportunity for institutional traders to add to their core positions. After 3 days of moving counter-trend the EUR was unable to take out the 1.2500 figure.  The UK traders immediately reversed the Asian move higher – as they began their trading day.

After the third lower high for the day (a powerful signal), a short is taken with a stop of 15 pips for a potential 65 pips to our Target 2.

Price dropped to the Asian lows in advance of the pending US news.  We move our stop loss to a profit stop and wait for the market’s reaction to the US figures.  Price drops to our Target 1 where we choose to lock in profits just above… allowing for some wiggle room.  Price takes us out and moves lower without us.

There were a variety of nice trade setups to choose from this session.  The EUR was my favourite as the 1.2500 level was formidable and the 1,2,3 pattern to follow meant the Big Boys and Girls were back in short.  In other words…strong hands taking money from weak hands.

Good luck with your trading!  The year is not over yet.

Be selective, keep your stops tight and don’t be greedy.

Back tomorrow if we find a trade.

AUD entry with trend as USD strength comes back into the market late session

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The moves overall this week have been counter trend.  Position traders may have given back a lot of profit.  The larger trend remain one of USD strength. The market has become less liquid this week but my bias remains the same.

The AUD moved above its Asian high and came right back down.  My preference is to short it and an entry is found with the US session underway.  As price moved down slowly, we opt to take any risk out of the trade by moving our stop loss to plus one pip.  There is no economic news to create any volatility.  Price meanders lower and we exit at the end of the UK session for a modest gain.

Be very careful with your trade setups and keep your stops tight.

Good luck!

Back tomorrow if we find a trade.

The GBP continues to whipsaw within a range

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The USD remains strongly bid going into the final month of the year.  Taking tenuous counter-trend trades is not an easy way to make pips.

With a positive UK Services PMI release and price breaking its session highs, a long is taken risking 18 pips for a potential 64 pips to our Target 2.  As the US session gets underway, price moves up and in advance of the US news, we move our stop loss to plus one.  Price initially moves higher on the news and closes bullishly.  We move our profit stop up allowing for some pullback but we get stopped out for a very modest gain.

 
The GBP currently is running into sellers above 1.5785 and finding buyers below 1.5625.  My preference is to short this pair after retracements.  The 1.5600 figure will be fun to watch.

ECB press conference tomorrow and NFP on Friday are the major risk events pending for the week – expect volatility.  Be very selective in choosing your setups.  Lock in profits and keep stops very tight!

Back tomorrow if we find a trade.