August 14th, 2008 Raul Lopez
In previous posts we mentioned the importance of the 1.4877 level. Right now, the Euro seems to be consolidating around that support level:
How should we trade the Euro under these circumstances?
The support level becomes a support zone, from the top to the bottom of the range: 1.4814 to 1.4979. There is enough space to take short term trades within the range, but once the market starts trading below 1.4814 I would forget about long trades, on the other hand, if the market breaks 1.4979 I would consider only taking long trades.
Regards,
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August 13th, 2008 Raul Lopez
Since last Friday the USD is gaining value against almost all pairs, at least from some majors like the euro, CHF and GBP. Will this continue?
Right now the euro is resting at important levels: 1.4877
Everything above 1.4877 means there are higher probabilities we get a retracement to 1.5370ish. everything below that level means the USD will keep gaining value against other majors (at least the EUR and CHF).
Cheers and good luck.
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August 6th, 2008 Raul Lopez
As we mention in this previous post, the EURUSD was in its way to the bottom of the range. Right now it is clearly in that zone (yellow box):
Is this the first call to start looking for long opportunities?
No, not yet, let the market tell us when it is ready to go north. I rather give up some pips before taking my position to increase the accuracy of my trades. So, for now, I’m going to wait a little and try to see whether the EURUSD is going to break the bottom of the range or head up to the top of the range again.
Cheers,
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August 6th, 2008 Raul Lopez
There are a few currencies that are trading either above or below the range (and as I tell my students, once the market breaks the range, it must be treated as if it was trending):
AUDUSD – Is trading way below the range (the bottom of the range was 0.9323), it is currently trading at 0.9095. Short positions are in play and will be until it reaches 0.8994 the next support level.
USDJPY – Is trading above the top of the range (the top of the range was 108.35), is it currently trading at 109.13. Long positions are in play here until the market reaches 109.83, the next resistance level.
USDCAD – Trading just above the resistance zone 1.0271-1.0350. Long trades are in play here until it reaches 1.0675, the next resistance level. The USDCAD is currently trading at 1.0461.
Other situations:
EURUSD – The EURUSD is still trading around the support zone (bottom of the range). I wouldn’t recommend opening short positions anymore as it is so close to the support zone and could have some upside pressure at this level.
USDCHF – Is trading exactly at the top of the range, I wouldn’t say its broken yet but I wouldn’t open a short position either… patience…
GBPUSD – It’s been trading erratically in the long term charts, right now it is approaching to the weekly’s chart support. If I had to do something with the pound I would go short targeting 1.9420ish, where it will find a lot of support just around that level.
Cheers and good trading.
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August 4th, 2008 Raul Lopez
As I said last week, I think the EURUSD still has some room until it reaches the bottom of the range:
So I’m still looking for short opportunities here with a target of 1.5372ish. The market right now is trading at 1.5575, this means we still have a potential target of around 200 pips… enough… what do you think?
Regards,
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August 4th, 2008 Raul Lopez
This week 4 central banks are to report interest rate policies:
US – Actual: 2.00% - Expected: 2.00% - No change
GB – Actual: 5.00% - Expected: 5.00% - No change
EU – Actual: 4.25% - Expected: 4.25% - No change
AU – Actual: 7.25% - Expected: 7.25% - No change
Basically, all investors expect no change on all of them. So be careful, if one of them is changed, wild moves could be expected…
I guess this one should of being my week off 
(but didn’t plan it). I will be careful though, I need at least 100 pips in my favor in any trade, so that I can leave my trade open during those announcements…
Cheers and have a good week!
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August 1st, 2008 Raul Lopez
When I wrote this post, I never though the AUDUSD would reach both targets that fast… but hey, the market is the market.
Hope you all benefit from this analysis, it was pretty accurate. But now, what are the possible scenarios? I would favor a bounce from that support level, however, we need to wait for Monday and see how it behaves at that support zone. Remember, I always like to see some market movement before I make my move…
Good luck and have a great weekend.
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July 31st, 2008 Raul Lopez
You should know that sometimes having the right mindset, is the difference between a successful trader and a trader “about to be successful” (Note that most traders, around 90% of us, are “about to be successful traders).
Anyways, I’ve been a subscriber for a long time in a newsletter that deals with psychology issues, when you have some time subscribe to the Market Wise Newssletter, it really helps, not only with psychological issues, it also goes throught related topics such as discipline, patience, an others.
Highly recommended!
Regards,
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July 31st, 2008 Raul Lopez
It’s been a while since the last time I opened a trade in the GBPUSD. If you take a look at its daily chart, you will see all its wild swings, some of them greater than 200 pips. As most of you already know, I like to trade in the short term charts but based in the longer time frames, so all my take profit orders are set based on the longer time frames.
With a chart like this, it would only be a matter of time before all my trades get stopped out. Check out the 4H charts, those swings are even clearer.
If I was to take a trade in the pound it would be only at the main support zone (around 1.9460).
Cheers,
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July 30th, 2008 Raul Lopez
Now we have a situation… as we mentioned before in our EURUSD and USDCHF analyses, both were trading in a range, we were trying to go short in the EURUSD and long in the USDCHF, and both of them moved in the expected direction. But now the USDCHF has reached the top of the range while the EURUSD still has some room to get to the bottom of the range. Here are some charts:
Now… take a closer look at the red-orange (not sure what color is it :)), the market could go up that high and come back, this means that the USDCHF still has some room to move for the upside. It would be difficult to take a long trade in the USDCHF, but that gives me confidence that the EURUSD could reach the bottom of the range. So, what I will be doing with these two currency pairs today (and possibly tomorrow) is forget about the USDCHF and look for a sell in shorter timeframes in the EURUSD, will take it only if the risk-reward ratio allows me to do it.
Good luck!
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