- Monthly : Need to close Feb13 > 0.8650 to confirm long term buy signal. Seems a given.
- Weekly : Taking out recent new high above 0.8716 now. Am comfortable with my long position as long as we close this week above 0.8692.
- Objective : 0.9000 looks a reasonable bet.
- Downtrend line around 0.8620 first broke hard (!) 2 weeks ago. Last week saw a sharp pull-back below TL. And currently, a sharp and equally powerful reversal of last week's re-entry.
- This kind of rough price action should have cleaned out almost all weak hands by now. The bulls have the ace in the hole. My expectation is that we try for 0.9000 from here.
- Trade : Have been steadily legging into this these past 2 weeks.
- Too bad I got shaken out of my short cable position at 1.5828. Contemplated for the longest time re-selling when it traded back down below 1.5825 after making the high of 1.5877 this afternoon. In the end, did nothing out of respect for the looming NFP.
- Of the hedges stopped out, I chose to re-establish the short Copper. That's now out of the money. If only ...
- Looks like will have to pass on the EUR/GBP trade. Too many positions to do them all justice.
- At 0.8560 now. Critical overhead resistance nearby at 0.8640. Potential game changer. Very significant as this is the monthly chart.
- Watching closely.
- Short at 0.8588. Was going to look for suitable place to cut loss. High since I sold is 0.8756. Yesterday's price action has made me change my mind about cutting this.
- Daily candle = Bearish engulfing pattern = represents an abrupt turnaround in psychology. If we see follow through selling, the weekly and monthly charts will be bearish too.
- So, short position is maintained.
- Was short (at 0.8368) and stopped out at 0.8428 a week ago.
- The long term technical picture remains bearish, although USD weakness (=EUR strength) might push this up some more.
- Happy to re-short this. Just like S&P, if at first you don't succeed, ....
- Broken out of my 82-84 range so cut my loss on this.
- Longer term chart still looks negative. But inability to trade lower in spite of Irish and Portuguese widening spreads of the past week makes me think that I will perhaps get a chance to re-sell this higher up.
- Frustrating because this was once in the money to the tune of over 200 pips. (Original in-rate 0.8368). Re-thinking if I need to have a rule about putting aside long term trend considerations and avoid letting positions in the money run into a loss.
- Whatever weekly triangle I was looking at earlier has now been broken on the topside.
- [Recall Aug10's wait in vain for a month end closing below 0.8184]
- Interesting technical development since then : This week's high thus far = 0.8390. IF this same high remains in place (ie no more new high set above here by this Friday), then we would have a nice 4th point to define a weekly triangle. The lower edge of this triangle is now at 0.8159.
- Thus, we can refine our next pyramid entry criteria to sell on a close below 0.8159 this week. (Now at 0.8259).
The current down leg from 0.8390 is driven by the 2nd chart here (Ireland-Germany bond spread). Widened out to a record +380, even above the highs set during the worst of the earlier Greece debt crisis. WSJ article yesterday discussing weakness in European banking sector (stress tests were a joke, understating many of the lenders' sovereign exposure. Barclays one of the culprits) the reason.
- Excitement of a couple of days ago subsided. Closed Aug10 at 0.8261 which was disappointing for long standing bears. The game of patience continues.
- Looks like 0.82/0.84 building up into an important range. Go with the break of either side, although of course my preference is to see it break the downside.
- Sitting already on a core short, one can afford to be patient and wait for the break. No need to rush into any hasty decision. [Unlike AUD/JPY where I would like to get short from square and feeling more than a hint of anxiety now. Still waiting for it to get near to the top of its triangle boundary to get short].
- Short since 12Jul10, average in rate 0.8363. Since then, we have been trading mostly 0.82/0.84 with a few unsuccessful attempts to trade below 0.82 briefly.
- Attached both are monthly charts - 1 line chart going all the way back to 1992 and other is usual candle showing recent time frame.
- Line chart : 0.8385 is very important chart point (dating back to Jul95) which was broken in Jun10, after which we whipped around as above.
- Recent monthly closes : Jun10 = 0.8184; Jul10 = 0.8312; Aug10 ? (<0.8184 or not ?)
- A close tomorrow (Aug10 month end) below 0.8184 would be signal for me to increase my short in a BIG way. [Now at 0.8177]
- The triangle objective remains at 0.7542 (horizontal pink line). From the line chart, a move of such seemingly large magnitude, is really nothing at all in the grand scheme of things.
- [This remains the best way to gain short EUR exposure, I think].
- Am short, averaged in at 0.8363.
- Thus far, this has failed to stay below 0.82 for long before it bounces sharply.
- Nevertheless, don't lose sight of the big picture. Look at the monthly chart. This has huge downside potential. Keep the faith.
- For me, this is still the best (least whippy) way to get exposure to short EUR.
- Sold 0.8316 increasing short position as planned.
- SHS top NL on daily chart broken, now at 0.8308 into NY closing today.
- Short from 0.8450, patiently awaiting further chart development to add on. Now at 0.8340.
- On the daily chart, looks like a possible SHS top being formed now. NL is at 0.8315. Will contemplate adding on to short on a closing break below.
- Both weekly and monthly remain in bearish mode in spite of having rallied from the recent low of 0.8065.
- Numerous attempts previously to sell this stopped out for small losses.
- Latest effort in at 0.8450 beginning to look like it might work. Both weekly and daily charts look like they have turned down finally.
- Trigger today was UK 2Q GDP +1.1%, >E+0.6% + Bloomberg news story EU stress test only on trading assets and does not include HTM.
- Now at 0.8336. Sell rallies now towards 0.8400.
- KIV monthly triangle downside objective is far far away at 0.7542 (bold pink line).
- Last week high in EUR/GBP = 0.8461. Sold again last night at 0.8450 on way down after seemingly to have topped out for the week at 0.8532.
- Apologies for late posting. Down with flu.
- Shorting EUR remains one of core ideas here. Question of picking counter-currency which causes least pain if wrong.
- Outright short EUR/USD a bit dicey still. By default, my long Gold position = short EUR based on current correlations.
- A half pointless post. Just putting on record a missed trade signal (excuse = WC) that I just noticed.
- On weekly chart, a SHS bottom is evident. Bottom at 1.1875, NL appx 1.2550, topside objective = 1.3225. How could I have missed this.
- Note weekly chart also broken DownTL at 1.2710 this week.
- On monthly chart, 1.3200 looks reasonably within reach before running into upside resistance.
- Definitely too late now to think about jumping on board buy signal (last 1.2910).
- Need to be very careful with my short EUR/GBP.
- As per other Risk Off trades, had cut loss on short EUR/GBP last week at 0.8320.
- Just re-established short @ 0.8378.
- Bearish chart outlook has not changed from previously. Original technical reasons for selling remain valid.
- Initiated short EUR/USD on 15Jun10 @ 1.2284. Now at 1.2203.
- Just bought cable at 1.4888 to lock into a short EUR/GBP instead. Thus legged into another batch of EUR/GBP at 0.8250 (market now 0.8193).
- As mentioned before, shorting EUR/GBP likely a better technical trade than an outright short EUR/USD.
- This broke below 0.82 convincingly yesterday. (Now at 0.8129). Strong downtrend on all my time frames.
- Next significant support 0.7692.
- Keeping a tight control on position size here, bearing in mind what happened to me with Copper most recently.
- Technically, shorting EUR/GBP a better bet than outright EUR/USD (for exposure to negative EU events). A lot more downside potential in the former.
- Will add on to original trade on pullback to around 0.8250. Now at 0.8207. Did not pyramid on the way down because was suffering on CNY move. Overall looking much better now.
