My Friday update was posted a little earlier that it s been customary here. It was written before US economic data was released. I expected volatility, as it was mentioned there, and wasn’t dissapointed. All Dollar pairs had great runs at USD expense, although Yen didn’t move as much as thought. However, fireworks spilled over to Canadian Dollar, something I had been counting on all week long. By the way, due to my shifting schedule, future posts on Friday migh be early from now on. We’ll see.
While CAD was the story, some loose ends must be tide up first. EUR-JPY was another pair being traded that day. One trade was already explained on Friday and second one had just been entered. Seemed to a great dose on indecision among market participant, as they were unable to push this pair, or any other JPY cross, either way. They got stuck in ranges set earlier that day. Frankly, those trading ranges were wide enough for some profits to made, even using the time frames I focus.
My second trade was entered at at 134.46. Price fell to 100 SMA of hourly chart, which proved to be a very good point for reversal. My objective was 80 pips or close of the market, whichever came first. Well, I overestimated just how far price would move, but came close. I exited trade few minutes after 15:00 EST, called it a day then. Exit turned out to be at 135.07 for 61 pips. In the end, I liked this sequence of trades. Entries and exits happened around the tops and bottoms. While incidental, it is still satisfying.
Now Canadian Dollar. I have been following one its pairs, EUR-CAD, all week long. Idea was to go long on a move above most recent top. Simple breakout play. Price didn’t want to turn and just kept moving down, with my order in tow. Finally late on Friday CAD came under pressure. By this time entry was at 1.5273, or about 200 pips below my original buy order from few days before. My target, however, stayed the same- 100 pips and it was met in about 3 hours.
In one of the comments in earlier posts somebody brought up a subject of a buy in GBP-CAD. Just like the one discussed before, this pair also buit a nice bottom and started to turn. While this was not really discussed outside of the comment section, I also placed an order there. Much like EUR-CAD here patience was tested as well, but slightly differently. Breakout happened a day before and price retraced sharply. Finally, on Friday it, objective was reached for 100 pips. Here is the chart.
I think it could be worthwhile to follow these pair for another week. Should be much more left on the upside. Now, I’m not looking for long term reversal or bottom, simply not enough evidence for that yet. Rather I focus on intermediate charts. Both hourly and 4h charts look promising and I’ll go with the higher time frame. EUR-CAD is the choice again .
I’m looking for an entry at 1.5423, but hope to see pull back go a little farther down. No guarantees for that and no ways to make it happen, so I’ll have to adjust to what the market is doing. Target for this trade is about 175 pips. It would be great to see it next week.
Another play is, as always, opening gaps after weekend. They didn’t come up often enough lately, or the ones didn’t meet characteristics of what I’m looking for. Eventually they will start happening again and I want to ready fo when it happens.
Mike K.
Yes I brought up the gbp/cad pair and it was a higher probability trade with gbp strength relatively vs euro , will be looking at eur/gbp pair closely to look for further upside in gbp/chf. The advantage of GBP pairs vs euro is they show greater volatility than euro but can whipsaw violently so you have to set bigger stop loss GBP
Hi Rob,
At the moment I stay away from the eur/gbp, more focus is on gbp/chf. At the beginning of this year I was trading eur/gbp all the time, but recently the daily ranges contracted comparing to those levels. Check out posts from January-February.
I take trades in all Pound crosses, but most of them are in gbp/jpy and gbp/chf. Wider stop losses are not a problem for me, I simply adjust the size. Also, objectives tend to be bigger. Thing with most GBP pairs is that they don’t chart as well as euro crosses. The patterns are less reliable, moves tend to be oversized either way. They are just a little more difficult to read, I think. At any rate I like trading them, and I guess you too.
Back in business, I see, ball is rolling. Please check your email asap. Thanks!
Find it interesting how you use MA as trendliness. Most people trade crosses of those lines, you use them as support/resistanse. Yet it is very selective. Would you be kind and shed more light on that?
Any more Yen trades this week? I think that jpy has more room to go down, but have hard time defining promising entries at the momemnt. Any ideas?
Stan, one of these days I’ll devote a post to it. Be patient.
Not really at the moment, We’ll see by next post.
I liked it. So much useful material. I read with great interest.
[...] I mapped out a long trade in EUR-CAD using 4H chart. So far this pair is still in holding pattern, within a wider range established last [...]
[...] but nowhere near that painful. I had couple of trades from earlier in the week. One of them was a buy in EUR-CAD. This has been live for a few days and today it came very close to reaching the [...]