EUR/USD/Trade Ideas

EUR/USD trade idea: Asian moves on a Monday are always wrong!

So goes the old market ‘wisdom”, that the first move of the week in Asia, especially if its a big one, is always wrong. I’ll go along with it for now, looking to buy a deeper dip in early Europe towards 1.2870 with a target at 1.3020 and a stop below the 200-day MA. I see no reason for us to exit range-trading mode and I like the risk-reward profile.

  1. Hi Sean,
    1. I remember you used to say this 🙂
    Well, it was true 2 weeks ago, but a week ago, actually the weekly high was at the Asian open…
    We will see now
    2. More important question: what would you consider a serious reason to move us out of this range-trading mode?
    Cheers, all the best!

  2. Great to hear from you Szabi. I think once positioning gets overly lopsided one way then we will get a move out of the range but don’t hold your breath, I thinki Deutsche estimated 12650/13250 for next 6 months

  3. well that’s a pretty optimistic target. the us moves on friday are also wrong. so many times it has been proved that way. so if us tanked the aussie on friday europe may take it higher today

  4. NAB has gone long already this morning.

    The NAB team has published its latest FX research note in which shows long EUR/USD on the Monday morning pullback at 1.2900. “Our target is a fresh high above 1.3172, being mindful of the 200 day moving average at 1.2825 and the recent intra-day low of 1.2804, our stop is 1.2775” NAB notes.

  5. It’s also interesting to see that the large specs stopped distributing their EUR shorts and COT net short positioning increased almost by half.

  6. Good morning Sean and all,

    Not so much to say this morning about EURUSD. Not even a clear bearish or bullish or neutral mood this morning!

    Analysis: The market has sold off during the Asian session because expectations for a Spanish bailout request and a Chinese rate cut during the week end did not materialize. Positive export numbers for the Chinese economy and inflation numbers that did not show further aggravation of deflationary forces should have given a positive tone to the market. But it didn’t. The main question in our view is how long can the market wait for Spain to request a bailout? The market displays a volatility contraction trend either in EURUSD or in the Spanish bond yields: participants are less and less active because conviction is falling on both the bull and the bear side. The wedge pattern is getting tighter. We expect the volatility to continue falling this week, and at some point we should switch from trading the rebounds on the wedge edges to trading the volatility breakout. We should keep an eye on the bond market to give us hints when the market will start making its move.

    Good luck to you all.

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