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January 26, 2012 19:09

Entered Risky EUR USD Swing Short At 1.3165

Posted in: EUR, USD
By:

Entered 2 new swing positions today, a EUR:GBP short and a EUR:USD short which I’ll discuss here.

Just to get things straight, this position is risky, has low probability of being an instant winner, and goes against short term retail sentiment which is incredibly bullish right now.

However if the main trend is still to remain down, todays short entry into strength marks an appropriate time to take advantage of that possibility. Based on my own personally developed swing trading system (which is always work in progress as I fine tune it), EUR:USD remains short on the Weekly time frame based on last Week’s close and still remains short on the Daily time frame, but only just! On the Daily time frame my system will switch long on a daily candle close above 1.3237 and I have therefore used this as the basis of my stop loss positioning.

The charts themselves don’t look hugely convincing for either direction, but here are a few in support of my trade:

Hourly shows a resisting trend line, an upside break of which will encourage me to re-evaluate the trade:

The Daily chart shows an area of resistance at 1.3168 that has historically acted as a trend inflection point. It is also worth noting that even if a long term low is in place, virtually all EUR:USD rallies from long term lows either retrace shortly after breaking the 50MA, or in the rare cases where this doesn’t happen they eventually come back to re-test the 50MA which in my situation would offer an opportunity to close the position at break-even if my analysis turned out to be wrong:

Moving on to the Weekly chart, I do have mixed opinions about this technically, but just wanted to point out that the 23.8% retrace of the down move so far also lies in the 1.3168 area adding further, albeit weak reason as to why resistance may be found in this price area:

So, it’s a trade that’s certainly not without it’s risks, more so with the constant uncertainty and news events out of the Euro zone, but on a risk versus reward basis, it’s a risk I’m happy to take.

7 Comments on "Entered Risky EUR USD Swing Short At 1.3165"
  1. Comment left on:
    January 27, 2012 at 07:57

    Excellent trade EUR/USD currently at 1.30835. Very good analysis. Keep up the good work.

  2. .
    January 27, 2012 at 23:30

    [...] the day I was amazed to log in that evening and see I’d been stopped out for a $58 loss.The EUR:USD and EUR:GBP shorts started off great and it was nice to wake up this morning to see a combined 115 [...]

  3. Site Administrator
    January 27, 2012 at 23:35
    RS2OOO says:

    Thanks Brent.

    I was thinking the same thing when I woke up this morning to see it 85 pips in profit. Even considered banking it but chose to hold on. Position doesn’t look so good now, but it’s still a valid trade until it’s stopped out so we’ll see what next Week brings.

  4. Site Administrator
    January 30, 2012 at 21:37
    RS2OOO says:

    It’s not very professional, but I’ve chosen not to stick with my system and I’ve closed out the EUR:USD and EUR:GBP shorts.

    I’m just not happy with the charts right now, and there will be plenty of opportunity to enter short again if need be. Both trades are just constantly on my mind every time a new bit of Euro news comes out.

    I’d consider re-entering the EUR:USD short at 1.3175 ish if resistance is found at that level, otherwise, I’d short on a break of the hourly channel.

    EUR:USD closed for +31 points.

    EUR:GBP closed for +11 points.

  5. Site Administrator
    January 31, 2012 at 12:02
    RS2OOO says:

    This morning’s technicals were a little more confidence inspiring so I have re-entered short at 1.3194

  6. .
    February 1, 2012 at 23:24

    [...] 1, 2012 23:24Brief Mid Week Trading Update – 1st February 2012 Posted in: General By: RS2OOOEUR:USD swing short has gone, +30 points banked. EUR:NZD stop loss moved to breakeven. EUR:CAD stop loss [...]

  7. .
    February 4, 2012 at 11:16

    [...] shown any signs of materialising just yet, but I chose to exit the position for an 11 pip profit.EUR:USD after hitting all time record short bets shows a possibility of being in a bullish consolidation [...]

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