EUR crosses/EUR/USD

EUR: Let the consolidation begin

Harry Hindsight will be screaming that it was obviously an interim top in the EUR but we’re better off listening to the interbank dealer who described Friday’s price-action in the EUR as being exhaustive; he’s been proven 100% correct. EUR/JPY and EUR/GBP have reversed the sharp gains from Friday and I suspect that the EUR will now slip into an extended period of consolidation.

I do not believe that the EUR bull phase is over, merely that we will now see a long-overdue consolidation and a healthy retracement. Use Friday’s highs as an interim top, pick some technical pull-back levels, and put your trading hats on!

  1. Morning Sean! What do you think of USDCHF now? With EURCHF seemingly to fall towards 1.20, isn’t it better to sell EURUSD?

  2. I’ve got a different take Jasper, I think this is the dip in EUR/CHF that we should be buying and I rebought last night at 12275. I’m hoping that EUR/USD now consolidates 134/137 and that USD/CHF starts to rise. Wishful thinking perhaps, but if I don’t talk up my positions then no-one will 🙂

  3. Hi Sean,

    Like you, I am now long EUR/CHF. How big of a move are you seeing/targeting and in what time period?

    I know you were pretty bearish CHF, but does this latest EUR weakness change that for you?

  4. Hi Sean,
    I’m actually taking your view too for the moment. 🙂 Just wondering when would be the time to bail out. Say EURCHF 1.22?

  5. Hi Anthony, I expect the CHF to play catch up with the Yen and the next EUR/CHF leg higher to be driven by USD/CHF this time. Timing is of course the only thing that matters, but I can see USD/CHF back at 1.00 and EUR/CHF at 1.35 in next few months.

  6. Jasper, not sure on your trading style, but I think if you’re s/t in nature, you can have tightish stop below 12240ish. Then look and see how it develops from there? I tend to take longer term views but if EUR/JPY starts crashing and EUR/CHF falls below 12240 then I will likely reduce position size which makes me then less inclined to panic

  7. Thanks Sean. Wow. That many big figures in a few months? Now that would be a decent size “Yen catch up” move. If only I had the discipline, patience, and staying power to hold on for such a move. 🙂 I’m wondering how much of a speed bump this latest EUR negative sentiment will carry on. It seems, at the moment, to be a pretty serious setback to EUR bulls. But as we all know, sharp sentiment reversals can be reversed right back again.

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