Gonçalo Moreira, CMT
Independent Analyst
- Recent historic volatility is still flat. ATR and Standard Deviation numbers are not necessarily lower than in July or the first half of August, but the current absence of significant price swings is something directional traders are struggling with.
- If volatility is evoked in the stock markets via bond markets, than we could see a restoration of volatility in the FX markets as well.
- While EUR/USD continued to chip away between 1.1300 and 1.1150, a clear break and stability on either side of this zone would help to determine the near term direction.
- The pair is almost breaking channel resistance with risk to assault the September high at 1.1457. Above, there is plenty room for fast appreciation due to stops and USD dye-hard buyers capitulating.
- A little wobble with a move down to short-term channel support can gather momentum to 1.10 then 1.09 en route to 1.07.
- I'm still a touch short at 1.1189, .1181, .1171, and .1124 targeting 50 pips each. Some pending limit shorts are clustered around 1.1450, specifically at 1.1448, .1441 and .1433
- Fresh long positioning is awaiting to be triggered at 1.1103, and below at 1.1059 or 1.1036 and more below (see chart).
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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