Price Action Trading - EUR/USD

Putting in some fundamentals to support a short trade later in the day .....

Bearish for EUR
- Portugal PM resigned after austerity budget was rejected. Likely to trigger bailout need.
- Speculation that EU countries would have to re-structure their finance, thereby weakening their economy, and also the need to find a permanent solution for the region’s debt crisis
- Yield on Irish & Portugal bonds surged to record level, with Portugal's cause being the breaking up of the government
- Capital shortfall in Spanish banks substantially higher than previously estimated by as much as 15.2B Euro due to real estate losses for meeting new capital requirement
- Expectation that the new EU stress test on the banks would expose failings in a number of ailing banks, given that the last stress test results were questioned.
– Downgrade of credit rating of over 30+ Spanish banks today
- Poll on Wed shows support for Merkel dropping sharply across the country ahead of election this Sun in important state Baden – Wuerttemberg. Could harden German’s stance for support on the bailout

Head & Shoulder forming ..... Neck at 1.4120. Target 15 pips below minimum at 1.4105

Can start the short position if the neck is broken ..... This should likely form an accelerated down move confirming the 3rd lower high on longer time frame ....

Forget what i have mentioned earlier .... the H&S never formed out successfully ..... tsk tsk tsk ....

It is always surprising how market sentiment and fundamentals can be so conflicting .... sooner or late, one will catch up with the other ....

As far as i can see, there is no good fundamental news coming out of Euro, other than the fact that it is about to offer better interest rate than USD, which makes for a carry trade with USD as a funding currency.

Anyway, as traders, we will just keep our eyes on the chart, and trade what the price action tells us, not the news. Sometimes, bullishness or bearishness know no limits.

Coming back to the Charts:

H1: Price action wise, a higher low has been formed at 4050 as per highlighted in the previous brief that it should hold and rebounce from there. Just that the rebounce had exceeded expectation by breaking the short-term downtrend line. Currently the price is supported from the back of this trendline .... indicating continued bullishness still .... Position taking wise, have to wait. This is a no-man's territory still .....

M10: Short term bullishness with higher lows formed at 4106, 4150. If price holds above 4100, a likely test of 4250 could occur. I doubt it would break thru yet ..... But watch for support at 4150 too. If this support fails, the bullish sentiment could be taking a discount.

Personally, i wouldn't want recommend any positions over this weekend. The EU Summit could have a strong influencing factor on coming Mon. If nothing concrete comes out of it, market expectation would be disappointed, and what went up could just drop like a stone.

Depends on what comes out .... but it doesn't look positive at the moment with Portugal's PM resignation, Finland having dissolved their government ... German Merkel having concerns with the timing with regards to the polls .... Well ..... I m BROTHER BEAR ..... but i will keep to the sideline for positions for the moment. Otherwise i would be a died bear

Potential Double Top formation with neck 4056, broken with a gap in the opening, and the gap has been covered.

If the double top unforms, target would be around 3890. But do expect strong support at 4000 and 3960.

A good short position would be at 4026. Short position should be invalidated if price move above 4085 ...

Updates for today 29 Mar 2011 ....

Daily: Rejects are strong above 4100 and not sustainable so far. If 4020 is broken, the upside trend would change for a bearish tone.
H1: Tested the downside trend and turned, potentially forming a 3rd lower high at 4150. Support at 4050 must hold if the bullish sentiment is to hold. Otherwise 4020 would be tested, and likely broken, targeting support at 4000.
Key level to watch. If Price holds above 4050.

A good short position would be when price test 4050, bounce up, then the short entry should be made. TP at 4000. This support would likely hold for today.

Personally, i don't advocate holding over-night positions, or extended positions due to the extreme volatility in this pair. If consistent win is to be kept, keep to short and tight TP and SL.

Oh Yeah, SL is good at 4116 ....

Forgot to add that 4000 might not hold for long .... but 3950 level is definitely strong enough to hold for a good rebounce ....

Price has bounced above 4050 now .... tentative personal sentiment .... it should turn around 4100 to 4110, which also correspond to 50% and 62% retracement.

Those who have guts can short at 4100 when the price starts to turn for max. profit margin

SL for this short is 4150.

For a upside retracement Long position,
If the inverted H&S / double bottom forms out, Long at 4076, targeting 4086 ...

No, the H&S nor Double Bottom didn't form out, but the Long position and TP remains ....

Good luck guys .... whoever is shorting now from 1.4100

I m done for the night .... hahahah

But the price action is showing a turn downside. Now this move should break 4050. Oh Yeah !!!!

Ciao!

Was slightly off in my previous analysis of the turn. But it happens all the time

Instead of turning at 62% retracement, it turned at 79% !!! Phew ....
Now, this looks like a continuation H&S to bring it down below 4000. It is a very valid H&S but it is not completed yet. So look out. SL should shift to 4130. Any break of the right shoulder, the H& S would be invalidated, instead with price action likely to test the Head level.

In the meantime, the neck do note is NOT AT 4070. That is a support but not the neck. The neck is at 4050.

If the neck breaks conclusively, i think 4000 wouldn't hold the strong move down also

Target of the move is roughly to 3970-50 level of support where a bounce upside would occur. The TP instead of being at 4000, can be shifted to 3980 to be safe yet more profitable.

Adieus until later today

Nothing new to what i have analysed earlier. Below 4050, Short. Above 4130 Long.

For Longs, keep the TP tight. It is too early to tell where it might bounce off at the moment. For all we know, it could be ranging .... between 4150 and 4050

The way i look at it, those that had shorted at 4100 or 4110 should take profit and close off the trade now. It is getting ranging, and unwilling to break downside. I would step out now to reduce risk.

If price hits 4130, the H&S would be invalidated. No point to wait until then when there is still profit at the moment.....

Starting anew after a long break from this forum .... hmmm...

Analysis from the Hrly & 10Min chart shows a downtrending move in a descending channel. However move is pretty close to channel bottom and support at 1.4175.

Key Point: If price holds below 1.4280, price is likely to test previous low at 1.4160 and grind towards 1.4140 where support is likely to be broken, targeting 1.4070 then 1.4015.

If price breaks above 1.4280, it is not cleared for a long, until it clears the congestion zone below 1.4300. So 1.4310 would be a good level to go long targeting 1.4345 as 1st target.

For now, a range is likely between 1.4280 and 1.4170 until price moves somewhat closer to the centre of the channel for the next move, where there is more room to play.

On the Silver Front:

The price failed to break support at 39.12, and broke resistance at 40 instead. Subsequently, buildup is observed before the break of next resistance level at 40.35

Long Entry was made at break at 40.41.
Half Profit taken at 40.85
Entry is protected with SL shifted up to 40.45
TP set at 41.25 where profit taking is expected. Will look for place to re-establish long after profit taking.

SL shifted up to 40.52 to protect profit

Price looks like it is on a 3rd leg acceleration towards target 41.25 if it holds above 40.52 where previous resistance is.

Take Profit Hit for this trade.

Entry: 40.41
TP (Take 1/2 @ 42pip)
TP (Take 1/2 @ 84pip)
Lot closed with ave pip profit: 63pip

To-date Trade from (yesterday 2/8/11)
Silver: +63pips

Swiss Bank intervention. Buying EUR/CHF and Buying USD/CHF, with stronger purchase in EUR than USD, resulting in the spike upside in EUR/USD.

Trend is still down if unable to clear or have a sustained clearance above 1.4280 - 300.

Short entered @ 1.4228, SL 1.43025. TP is open for now. Having said that, 1.4160 is a good level to take half profit (i.e. exit half the position), and protect the entry .... then see if the horse can run south ....

EURUSD stopped out for -75.2pips

Re-entered Short at 1.4320, corresponding to prior double top resistance at 1.4345.
SL set at 1.4377 above congestion resistance on the 27-28Jul timeframe.

TP as open.

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EUR/USD: -75.2pips

Silver: +63pips

Take Half now at 1.4150 from 1.4320. Leave the other half to run.

TP for 170pips. Pending the other half to close. Target take another half at 1.4080

SL shift to 1.4280

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EUR/USD: -75.2pips

Silver: +63pips