EURUSD soars higher in light trading
Written September 4, 2009 at 12:28 PM EST by Greg Michalowski
So much for resistance at the 1.4273 level… (see prior post). The EURUSD went through the resistance level like a hot knife through butter. The pair continues to have upside resistance against the trendline at the 1.4340 level. The high reached 1.4327. The old high for the day at 1.4289 is now support (1.4285 is the 200 hour moving average – green line), but no promises in this market.
Categories: Forex Trading | Tags: EUR/USD
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Hey Greg,
I’ve been watching this pair exclusively for the last 24-48 hours. Currently I am in at $1.4288, got in at this price last night only to have long stopped for 20 points & sell-stop @ 1.4255 going off giving me a nice 49 point to the downside. Net 29 points. Now I am back in at $1.4288 with trail + exit half position at $1.4346
Do you see a potential to the upside of $1.44? So far I believe it’s been range trading between $1.4331 and 1.4206 (any time short-term support breaks-> 1.4206, any time short-term resistance breaks- $1.4331) Would it be safe to say that another retest of 1.4331-1.4346 can take the pair higher? Potentially $1.44-$1.4535?
Being long at 1.4288 is a good thing since the 200 hour MA and the 100 hour MA are around that level (1.4285 and 1.4273). The MA look to be trying to bottom and move higher which is good as well. You did not mention a stop level and this is a concern. You need to know the level where they market is not doing what it is supposed to do. For me, I would have my stop below either the 100 hour MA or the 200 hour MA. The market should not trade below these levels given the move off the trendline support and key support at 1.4183 today.
On the upside, the first hurdle is to get through the trendline at the 1.4338 area. This should give the market some confidence to move higher but when the market is compressed like it is, the resistance levels seem to be around every corner 91.4348, 1.4377 to be exact). Nevertheless, the 1.4405 to 1.4411 (high close price for 2009) are KEY, KEY levels.
If the price can get through the 1.4338 level look to move up your stop to a level that makes sense but gives you some profit. 1.4298 looks like a logical level as 1.4299 has been the low after reaching the last high.
What you have to be aware of is it is Friday. So you have the added risk of the weekend. This could work for you or against you. That is even with a stop loss in, the market can gap below the level and you could get stopped at a lower level. So you must weigh that dynamic in your decision.
I hope this helped, but please find a level where you know your risk, then look for target profit levels. Doing so, will allow you to properly manage your risk and that is what successful trading is all about.
Good luck,
Greg Michalowski
I have an automatic “silent” stop-out method. But fortunately this was a good trade. Just went to 1.4360 after cutting through 1.4331- 1.4336 took half off the table, looking for 1.44 to hit =)
I am so excited I am at a lost for words as the realization of the accuracy of my system on the longer time frames has been reinforced.(it’s not only good for short-term scalping) System was telling me if 1.4331 held and 1.4346 held.. the next logical target was 1.4535.. I wake up this morning only to find it retracing back from 1.4535 and near 1.45. Wow. This was accurate to the penny(or 10th of a penny).. I have a new appreciation for systems trading
You did in fact outline the trade progression in your post last Friday. Congratulatons. Be sure to keep those “If …. should” points in your analysis. If the market can hold the 1.4331 level, it should move higher. I personally, as you know, would have had 1.4405/11 and 1.4447 as interim prices to get through but perhaps you had those levels in mind as well. As it turned out, you got the immediate satisfaction in less than one day! Congrats.