Gonçalo Moreira, CMT
Independent Analyst
- When the ECB announced more straight QE and deeper negative rates the EURUSD jumped from 1.0950 to the by-then potential resistance around 1.120;
- After that, the Fed adjusted projections for interest rate hikes for this and further years lower from four to two hikes;
- The pair visited the high of February 11th, a key reversal date in many other markets and reverted back to where we are at time of writing;
- A break-out through the 1.13 resistance handle would force shorts to cover and be an invitation to momentum traders to enter the market and take the pair to the upper boundary of the ascending channel now at 1.1470 and ascending 25 pips per week (approx.);
- On the down side, a slide below the current tentative support at 1.1150 gives the sellers a reason to charter the below ascending support at 1.0850 and below at 1.0770 both diverging;
- The direction should be spelt out in the upcoming two weeks as other major markets are at key technical and near cyclical time bands;
- Be aware that further gains meet a selling opportunity at 1.1199, 1.1246 for small gains, and then above at 1.1440;
- Having much less long trade open at the moment the most sensible option is to increase the longs substantially if the February highs are broken. Right now, discernible buy points are 1.1070 where I've two orders sitting but below is thin air.
The trading methodology reported in this analysis is based on a non-directional approach. It is meant to capture the most amount of pips from the constant price oscillations, either up or down. Each trade has a take profit of 50 pips, a stop loss of 500 pips. The size of each trade is regular, but trades can be stacked around key support and resistance zones, increasing the overall position size around certain price zones. The system can perform either in trending or range bound markets, but it suffers when there is an extreme unidirectional price advance. Buy and sell positions are taken with two separate real accounts.
To learn more about the method, you can watch these special webinar series:
Exploring the Coast Line of Foreign Exchange Land - Part I
Exploring the Coast Line of Foreign Exchange Land - Part II
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