EUR/USD

EUR/USD: Look for sharply increased volatility this week

We’ve had a number of weeks of sideways trade but that’s about to end in my opinion, so forget about trying to pick the right direction all the time and put your trading cap on!

The election on Tuesday in the US is the big risk event and the market hasn’t really put on any big trades ahead of this it would seem. Last week some technicians were of the opinion that the bullish cross of the 50-day MA over the 200-day MA were an indication that the market was turning bullish yet today others are saying that they break below the 200-day MA is bearish! Hocus-pocus, technical schmanalysis; nobody has any clue where anything is going. Wait for some short-term trends to initiate, then counter-trade as trailing stops get triggered in an environment lacking confidence and momentum; that’s how I read this market.

Is it possible that we see levels near 1.2650 this week? Absolutely! Is it possible that we see levels near 1.3200 this week? Absolutely! I’m hoping that we finally get a market where quick-witted traders can have a definite advantage.

  1. Morning Sean,

    I hope you had great week-end ? Nice sentence and so true 😉 “Wait for some short-term trends to initiate, then counter-trade as trailing stops get triggered in an environment lacking confidence and momentum; that’s how I read this market.”

  2. Morning Papillon. I’m just trading AUD/USD at moment, have short position which I’ll actively trade and try to improve average as well as hopefully get better feel for levels/direction. Still hanging in there with 1/2 of my EUR/GBP but my s/l is only 10 pips away so I’ve more or less given up on that one 🙁

  3. Good morning,

    Regarding EURUSD, here are my recommendations today:

    – Best: Buy EURUSD at 1.2740 (fibo 61.8%) with both short term (1.28) and long term profits (1.335) in mind PROVIDED the Greek parliament approves budget.
    – Medium: Short EURUSD on rallies at 1.289/1.2915 with SL 1.2955, target 1.2850, 1.2740.
    – Very Risky: Buy EURUSD at 1.2830 SL 1.2790, target 1.2870-1.29.

    Analysis: The risk off reaction of the markets to the positive NFP numbers on Friday signals that Romney is a much more desirable president than Obama for the markets. Also the relatively low level of involvment of the market participants suggests a likely volatility boost once the election is over. We therefore expect short term further sell off if Obama is elected and a rally if Romney becomes president. With that said, the market will probably stay quiet till Wednesday. EURUSD remains ambiguous since it did not close below the 200DMA. Despite the sell off of Friday, we expect a mild correction this morning towards 1.2870-1.29. However, further declines seem warranted. The main risk for EURUSD is the Greek parliament vote today. A positive outcome would be mildly bullish, while a negative outcome would be extremely bearish. Therefore any trading today must done with this potentially very dangerous event in mind.

    Good luck and be carefull.

    http://www.chifbaw.com/en/wp-content/uploads/2012/11/eurusd051112lo.gif

  4. I am very impressed with your strong view (i will cross the finger for you for the RBA meeting) and how you build position for AUD/USD. it’s not my case with this market, it’s too hard to pick anything by now, so i am waiting for how long…but I prefer this approach 😉

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