EURUSD Short-term Path of Least Resistance: South
|Technical Outlook:
- Global bond yields continue to climb, specially US Treasuries, with markets pricing in a rate hike in the near future. The DJ Utilities average illustrates this phenomena.
- The above movement propels the USD higher with the Dollar Index reaching a meaningful resistance, with the media amplifying the action.
- The inverse situation in the EUR/USD, which now focuses on horizontal support around and sub 1.0900 where I presume will be the next auction zone.
- Risk of an assault to higher levels would only be considered if .1077 support, now resistance, is cleared and more so if the 50% Fiibo, middle of the range .1270 is violated on a rebound.
Positions and Strategy:
- Bought at .1049 aiming to .1100 and bought at .1224 targeting .1247. Next limit buy is placed at .0998 targeting 80 pip at .1078 and another limit at .0912 with open target for now.
- Aggressive shorts can use the aforementioned .1077, but I prefer to set my sell limits at .1093 and .1340 for now.
- FXStreet contributor's positioning can be followed here.
Trading Methodology:
The trading methodology is technical discretionary with strong enphasis on risk management: control of used and available margin, effective leverage, and position sizing. It is meant to capture the most amount of pips from the constant intraday price oscillations in the EUR/USD while keeping the floating draw down at bay. There is no use of stop loss orders for each trade, instead, the risk is managed as a whole, for the entire position.
Buy and sell trades are executed with two separate real accounts. The track record can be seen here.
Trades can be followed in real time through Twitter.
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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