Monthly Thread: July 2004

rezo_s

Established member
511 1
Hello Dear forum members. Nice to be back. Had some time off and now will hopefully be back on trading as usual.

I am currently consentrating on 3 pairs, and will take a trade only on one of them:

- USDCAD for selling: today it was only as high as 1.3265/70. I would like to sell in 1.3300/50 price area at least. We have a warning candle for today, and therefore we may expect for the correction in order to get good entry prices in coming couple of days.
- EURGBP for buying: also moved only slightly today - was as low as 6700. Strategy for tomorrow: will try buying in 6670-6790 area

- AUDUSD also didn't correct much. Actually it didn't move down at all compared to last week's close. Moved a bit higher and corrected back. Same here as on CAD: we have a warning candle, so lets give it some time to take the price to attractive levels.

I will post at once when I enter any of those possible trades. For now those are only pre-trade observations.

I wish you all to have a very profitable week and month to come,

Till tomorrow,

Best,

Rezo
 

rezo_s

Established member
511 1
Hello Everyone.

No trades for today either.
Was looking at EURGBP. Only that pair entered my pre-estimated price area where I would consider buying it, but right now it became questionable if at all it can resume going up.
Even though we have a double bottom on weekly chart around 6530/40, I would like to see some more action on this pair. Maybe see how it handles the 6650 area if/when it gets there. Today it went as low as 6665. If we see some bottoming around the '50, I may consider buying.
As for the rest 2 pairs I am looking at - AUD and CAD, both made attempts today to go higher and did so against the dollar, but then retraced, thus forming warning candles on Daily charts once again. this is the 2nd following day now that we see such candles, and therefore we can assume that we will see at least some more consolidation/correction.
Selling USDCAD may be a better idea, because on AUD we have the 7200 high which is a strong resistance and holding for now. But still, buying AUD around 7075-7100 may be an option. On the other hand, USDCAD already broke down the important 1.34 level.
I will be looking closely at 1.3300/50 area to sell USDCAD. Maybe slightly lower; maybe slightly higher. It would be nice if we saw those levels today, but unfortunately market behaved differently and formed a warning candle. So now I am looking to see those levels tomorrow. I will consider selling once it gets there.

Will post once if I enter any trade.

Good Trading! :)

Rezo
 

snowflake

Newbie
2 0
Hi All

Have closed two Eur/USD longs today for +78 and +71. Very puzzled by $ weakness though - not sure whether to open any more Eur longs or not - any views?

PS My normal strategy is to hedge using USD/CHF and EUR/USD
 
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frugi

1
1,827 126
Hi snowflake,

Congratulations on your longs.

I was wondering why you find the dollar weakness puzzling? The recent economic data have been poor, e.g. non farm payrolls, hourly earnings, ISM etc. which suggests that rates may not rise as quickly as expected. This usually, but not always, leads to a weakening currency. Also throw in the economically stifling oil price, the ongoing terror threat to US and the the risk that OPEC might suddenly decide to price in Euros and there's a recipe for lots more $ weakness. However I admit the clear evidence of inflation, conveniently 'tamed' by the government reports, muddies the picture somewhat. There's an interesting article on Zeal here: http://www.zealllc.com/2004/usdrate.htm

I'd add longs if we close today above 1.2350 which is a significant daily 50% retacement level. A safer entry might be found around 1.2200-1.2220 where it first broke out of the daily up-sloping consolidation. Just my amateur view, mind!
 

snowflake

Newbie
2 0
Hi Frugi,

Was aware of the poor US data, still I had reasoned that the Euro-zone was not really doing much better (though France at least posted a good Q1 GDP and seems to be coming out of it's recession)- I don't think euro-zone rates will rise till the Autumn. And I think the US has inflation problems, and will have to raise interest rates further...

Also, I had reasoned that the high oil price was $-supportive, for simple transaction reasons - i.e. you have to sell your currency and buy $'s before you can buy oil - and the higher the price, the more dollars purchases needed, assuming volume of oil the same - and oil inelastic, so volume doesn't shift down when price rises..

I have some USD/CHF longs still open, - will have to do as you say and open another couple of EUR/USD longs as a hedge - I just wish it would pull back first. Much prefer it when it simply range trades - easier to make profits! Ah well.

Thanks for your reply.
 

frugi

1
1,827 126
Also, I had reasoned that the high oil price was $-supportive, for simple transaction reasons - i.e. you have to sell your currency and buy $'s before you can buy oil - and the higher the price, the more dollars purchases needed, assuming volume of oil the same - and oil inelastic, so volume doesn't shift down when price rises..

Good point I had not though that through :)
 

rezo_s

Established member
511 1
Good day fellow traders.

Today we are seeing some correction on the market. Now the question is whether we are done or not. Will this be it, or will we correct more...? For now what we see can be called only light corrective move, and nothing more than that. Do we need to see more correction before the recent tendency resumes or not? Well, trend is lilkely to resume - thats one of the basics, but in order not to get our stops hit before that happens, we need to enter at best possible time and price.

I am still focused on the three: AUD, CAD and Euro.

Euro was as low as 1.2344 and currently trading at 1.2375. Possible scenario is that we may see the retest of the 1.2350 level which was an important resistance and now is providing us support. I think we may retest it soon and even if we go slightly lower and see bottoming there, buying Euro should be a good trade. Stop belwo 1.2310 and initial target at 1.2470, followed by the main target at 1.2630.

USDCAD retraced to as high as 1.3251 and is now at 1.3243. I would like to see how it handles 1.3250-70 level, because if we break higher, it may trigger change of the range to 1.3270-1.3340, where selling this pair may become much more attractive for market majority. Lets also not forget about the 1.3290. Its also possible that we dont see any more upside movement, the maximum we see is the 1.3250 or the recent day's high of 1.3290 and this is as high as we get. I am watching this pair. Stop loss above the mentioned 1.3340 vevel is the best way to take it. I think if we get to 1.3290, that level can be a good price to consider selling. Initial target is of course the round 1.3000 figure.

Aussie: unfortunately (?) it refuses to correct seriously. It was as high as 7285 yesterday after overcoming the important 7200 level which was the May 29th high, followed by a break of 7240 area which is 38.2% retracement of the big move from 0.8000 high - 6770 low. Today we were as low as 7239; i.e. this very 7240 level is at this point providing the support. We may test this level for now, and if we see some more attractive levels like 7200 and get bottoming there, it may be a good opportunity to buy Aussie.

I will post once/if I enter any of these trades with exact entry, stop and tgt levels.

Have a good trading day,

Rezo
 

rezo_s

Established member
511 1
13:43 UK:

We got the Trade Balance figures out.

The USDCAD had a sharp sell-off from the 1.3250 level hour b4 the announcement, and now as we see after the US number being slightly better than the previous, USDCAD and others are playing the retracement with better confidence.

USDCAD is currently at 1.3275 after being to new day high of 1.3280. Now it is in the range and of 1.3260-1.3340 area which I mentioned earlier.

Euro is also lower and is trading at 1.2325 now.

AUD retraced further and is now at 7238 - still holding firm.
 

rezo_s

Established member
511 1
USDCAD is now near the 1.3270-90 area, where it met nice resistance last week. Lets look how it handles the area this time.

Euro was as low as 2310. No trades for now.

AUD is holding firm and is the favorite at the moment for me to focus on.

Lets wait and see how it goes and consider entering the market later. If not today, will see tomorrow.

As promised, I will post the moment I enter the market.


Good Trading,

Rezo
 

MysticalTrader

Active member
165 1
Is that what caused the 90 pip drop?

MT


rezo_s said:
13:43 UK:

We got the Trade Balance figures out.

The USDCAD had a sharp sell-off from the 1.3250 level hour b4 the announcement, and now as we see after the US number being slightly better than the previous, USDCAD and others are playing the retracement with better confidence.

USDCAD is currently at 1.3275 after being to new day high of 1.3280. Now it is in the range and of 1.3260-1.3340 area which I mentioned earlier.

Euro is also lower and is trading at 1.2325 now.

AUD retraced further and is now at 7238 - still holding firm.
 

rezo_s

Established member
511 1
For now I see no other reason.

Market was willing to see some retracement in order to start considering new wave of USD selling. USD was oversold and if we already were in a srtong trend, this may not have happened; but due to the recent months market sensativity and mixed sentiments, everyone prefer waiting for better prices to enter the market. Therefore even small reason is enough to trigger another long coverings and small short position taking (for ex. EURUSD). Those who were holding longs, stared squaring when the deficit tightened, and intraday traders/speculants shorted EURUSD. Still, for now I see it only as corrective move which is very healthy for trend to continiue.

Good Luck!

Rezo
 

darktone

Veteren member
4,016 1,084
hello rezo..do you have an opinion on EUR/JPY. looks well for a short to me at the moment with resistance around the 134.80 - 135 mark.

Regards
dt
 

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rezo_s

Established member
511 1
Hello my friend.

If we look at the weekly chart, you can see a clear triangle there. Now it looks like heading towards the upper side of the triangle, and it looks a bit dangerous to me to sell this pair right now. Its is also not too confident about moving up. Therefore I am sidelined on this one for now. Once we get a clear break on this one, or bounce off/from either top or bottom of the triangle, I may start looking at this pair.

Just my 2 c.

Good Luck my friend,

Rezo
 

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