EUR/USD : Better Short Than Cable

• Attached EUR/USD long term (monthly) chart. Very bearish formation, mega top formed, neckline (1.2120) broken, currently in a triangle consolidation holding pattern, awaiting developments to drive an eventual downside break towards the historical all time lows. Yuuuge trade in the making.
• Chart is telling me that Brexit spillover effects (into EU) will be bigger than Brexit itself. Selling cable itself is not necessarily the best Brexit trade in the longer term. Shorting EUR/USD will be the better trade eventually.
• Triangle boundaries for this month are at appx 1.16 and 1.06. Would appear to be quite a few more months before a triangle breakout trade occurs. Must monitor this.
• EUR/GBP chart does not suggest the above conclusion .. yet. 

Chart Updates

EUR/USD : Sell Stop-in @ 1.0712

• Monthly and Weekly bearish charts unchanging.
• Daily : Recent consolidation between 1.05 and 1.10 seems to be over. A very unconventional triple top of sorts (loosely) at 1.1050 broken neckline at 1.0713. Sell stop-in triggered at 1.0712. Target 1.0374. [But of course big picture downside objective is much much lower].
• Watch recent low at 1.0462 as well.
• Most crowded trade in the world so extreme caution warranted. Stop close back above neckline. 
• Such a coincidence to get 2 trade signals on first day back. 

2014 : Abysmal

• Net result for 2014 - down by pocket change magnitude. Trading was very conservative and sporadic due to various non-trading personal commitment. Operated under very difficult conditions as well in terms of capital (in)adequacy = risk appetite severely curtailed.
• Chart on RHS is perfect summary of my year. My view = rising US rates. Chose to express in ED futures given experience of my previous life. Unable to spread risk (eg diversify some in FX) as per my normal practice due to inadequate capital. Turned out FX trended strongly (no position) whilst I got whipped to death in Rates (foolishly actively involved).
• Performance summary in one word. Abysmal. This really should have been a huge year for me given the trending nature of a few of my key traded markets. Truly disappointed with myself. Lost soul.

EUR/USD : Weekly Turned

• Took my eye off the ball, missed the initial break of 1.3515 in mid July while I was away. Really should have had a sell break GTC order in place. Unfortunately not.
• Weekly chart : Trend change apparent. Want to be selling rallies (until 1.3515 is taken out again). Subsequent to initial break, had order in place at 1.3450 which was not filled.
• Awaiting another short entry opportunity. Market almost always give you a 2nd chance. (The first pullback to 1.3444 wasn't it). Patience is key.

EUR/USD : Roller-coaster, Close Shave

Where now? No clue.

In the end, thankful for getting stopped out (16:00 1st spike) after France PMI data came out stronger than expected. If not, I would not have pulled my sell stop (pyramid) at 1.3783 and would therefore have been caught with an even larger short into the 1:00 am squeeze to 1.3875 (2nd spike).

EUR/USD : Crossroads Part 2

• FX markets interpretation of FOMC changes = hawkish = firmer USD.
• Monthly : Traded back to below the upside breakout line.
• Weekly : Possible evening star being formed = reversal to downside.
• Daily : Yesterday's FOMC driven price action = strong reversal. Today, an uptrend line is being tested.
• Trade : Initiated fresh small short position at 1.3799. Go with the downside reversal for now. [Neglected to look at the chart this morning, or else would have put on at a better entry level]. Gotta keep at it till it works.

EUR/USD : At Crossroads

• Price action of last 2 days looks bullish, above 1.3832 chartpoint.
• Perhaps there is a trade here somewhere. Just not sure whether to go with the apparent bullish action or to fade it. This could be near to top of trading range, or start of new higher range.
• Might start with buying as near to 1.3832 as possible and stop reverse on close below.

EUR/USD : New Short @ 1.3523

• For now, seems like I got lucky and was filled in my EUR/USD limit sell order at today's high. Trigger for the fill was weaker than expected ISM Mfg report, which also took out my stop loss on the short EDZ5 position. Win some, lose some.
• Monthly : Big range consolidation, useless chart pattern as it stands. The best I can say is 1.3893 looks more like top of range than anything else, and we are on a down leg now.
• Weekly : Support line broken convincingly after initial few weeks of whipsaw. Should we break 1.3295, we could be looking at a double top.
• Daily : As per weekly. Old support line is at 1.3555 (=new resistance), so I want to stop out this fresh short trade on a close above.
• So, 2 positions now - short Copper (6RU) and short EUR/USD (2RU). Stopped out on all the rates positions.

EUR/USD : Range Top

• Range trading outlook now on the weekly chart.
• Possible triangle upside break negated with today's trade back below 1.3300. Market seems to have run out of steam between 1.33 and 1.34.
• Lack of technical and/or trend signals here and elsewhere. Have thus taken a short trade in EUR/USD on assumption that we are nearer to a range top, perhaps even heading all the way down towards 1.2800 before we see a new meaningful signal. Stop close back above 1.3300.
• Trade : Short at 1.3295.

EUR/USD : Weekly SHS Top

• Waited a few months for this already. Finally, the weekly SHS Top neckline being broken now = fresh sell signal.
• Sell stop-in at 1.2800 triggered. Short EUR/USD at 1.2799.
• Fresh break = cheap trade = good risk/reward. Stop on failure to close below NL or close back above.

EUR/USD : Keep Trying

• Weekly : Possible SHS top being formed. No trade yet. Neckline is at 1.2777. Sell stop below.
• Daily : Double (/triple) top neckline at 1.2953 broken. First attempt to short at 1.2919 stopped out at 1.2966 just after Bernanke written testimony released (subsequent reversal on "taper" suggestion).
• Trade : Try again on the daily DT. Just sold at 1.2936. Very small position, give it a wide berth this time.
• [Usual monthly chart not included here, system not updating. In any case, not interesting. Largely sideways picture.]

EUR/USD : Daily Double Top

• Had not seen this when I did the earlier post today on the weekly SHS top.
• On the daily chart, there is a double (or even triple) top around the 1.3200 level. Neckline for the formation is at 1.2953.
• Tonight's surprise spike in US initial jobless claims to 360K has caused general USD weakness. Have made use of the opportunity to increase long USD positions here.
• Trade : Sold EUR/USD -1.2918 vs the daily DT NL at 1.2953. Also increased gold short at 1387.
• This EUR trade is quite separate from the weekly SHS trade I am stalking as per the earlier post today. This is based on the daily DT, with a tight stop here above the DT NL nearby.

EUR/USD : Stalking SHS Top

• Potential SHS top formation on weekly and daily charts.
• Neckline at 1.2770. Sell the break. 
• As always, don't be early. Wait for the NL break, so you get a cheap trade with stop close above NL. Early = potential for whipsaw and poor risk/reward.
• A bit premature now, but bear in mind this is a potential 1000 pip trade.

CAD+EUR : 2 False Breaks

• Failure of breaks = usually good trade signals to go the reverse of the original trade.
• I see 2 such signals in USD/CAD and EUR/USD now. In fact I did have both trades on last week but did not stay with them because of the cable short squeeze.
• Now that my P&L is looking a whole lot better, reckon I might try to get back in : -USD/+CAD and -EUR/+USD.
• The break/false break points are 1.0190 and 1.2875 cash [=0.9796 and 1.2884 M3 futures].

EUR/USD : Sell Stopped-in at 1.2963

• Recent low of candlestick bodies 1.2963. Sell stop-in triggered so short now. This should be start of a new leg down on the daily chart, to 1.2750.
• Meant to be a short term trade to begin with. But recall that the old ISHS NL is nearby at 1.2918 (see weekly chart). Sell more on the break of that. Will shift trade from Trading to Core if that happens.

EUR/USD : Killed the ISHS

• Formally killing my long-held call of ISHS for weekly EUR/USD now. (Action taken on 21Feb at 1.3286).
• Monthly : Useless chart for trading.
• Weekly : Pulled back too much to hold onto the ISHS. Give up.
• Daily : SHS downside objective remains 1.2880. 
• Trade : Have just squared off most of my short EUR/USD risk (at 1.3081) to leave just a token position for this remaining move.
• Better to conserve firepower for other charts (eg GBP, CAD) where there is a nice long term force imposing itself in tandem with the shorter term story. Here, I am left with the daily only.
• Similar story for the USD/JPY. There is a distinct possibility that last month's candle is the middle candle (shooting star) of an evening star (= top) pattern. So will leave it alone and see how this month's price action plays out. Revisit in April. In hindsight, it was the correct decision to stay out after ISHS objective was met so avoided completely the risk of being caught by the recent plunge from 94.75 to 90.85.

Impact of Italian Elections

"Why Italy's Elections Caused Global Markets to Crater" from Business Insider by Joe Wiesenthal. Good, simple, clear explanation.

EUR/USD : Pullback to Neckline

• SHS trade going almost exactly according to game plan.
• Initial trade : -1.3234
• Pyramid : -1.3277 and 1.3313
• Relief rally post Italy poll close (not disastrous, at least not initially) stopped right at the SHS NL at apx 1.3320.
• Downside objective 1.2880.
• As mentioned before, market almost always give you a 2nd chance to get on board if you missed it the first time round. The difficult part is staying patient whilst uninvolved and not jump in at levels which results in a poor entry average. That requires confidence, experience and lack of ego (of needing to sell tops and buy bottoms).

EUR/USD : Missed A Trick

• Had been running long EUR (weekly ISHS) vs short GBP (triangle breakout) recently. Following the GBP periscope, I unwound the long EUR (from 1.3286 downwards) leg of the EUR/GBP trade to get more naked short cable.
• Should have been paying more attention to the EUR/USD daily chart. By sheer coincidence, there is a SHS top with NL at 1.3303 which I missed. So got out of my long EUR/GBP because of the cable chart when in fact I should really gone further and gotten naked short EUR/USD as well on the break of 1.3303.
• No matter. Initiated a new short EUR/USD @ 1.3234. Better late than never. Plan is to add another unit if we approach 1.3303. Cut loss above.
• Of lesser import, there is an uptrend line at 1.3220 being tested now. (TL breaks make lousy trade signals, except when you are not paying attention).
• SHS downside objective is 1.2878.
• Need to re-think the weekly ISHS. Might be time to consign it to the failed dumpster.