EURUSD: FXStreet's contributors have buy orders around 1.14

 

• On the 3rd May, the euro overshoot on broad based US dollar-weakness/yen strength to 1.1616 where sellers were happy to absorb novice stop losses up to the ascendant channel upper line pictured below;
• Silent speculation is mounting that the upswing cycle is not yet over and the market could be faced with another episode of short squeezing above 1.16. I would be prepared for this knowing too well that headline grabbing targets in this pair are usually South not North;
• If that route is taken, renewed hedging measures would be required. The reason I've taken profit on some of the positions thought to serve as an hedge against my short leg, was the overshooting nature of the market and the clear price target;
• If I see a healthier surge higher- now that weak shorts are out of the way-, I would build up at least a 50% hedge;

 

 

 

• Yesterday's failed attempt to place a more firm footing above 1.1500 makes sense if we notice how the area above that handle was -and still is- more crowded than the downside with technical indicators looming as obstacles;

 

 

 

 

• From a traders positioning perspective, FXStreet's dedicated contributors have fresh buy orders clustered around 1.14 where price quotes at the moment of writing. Further falls are still very much possible if the buyers lose control of this pivotal area;

 

 

 

 

• With that said, further losses would meet my long limits at 1.1386 aiming at 1.1480, and below lower at 1.1200 for a default 50 pip;

 

 

• On the short side, 14 trades are open between 1.0559 and 1.1273, and new limits are awaiting at 1.1465 targeting 1.1380 and above at 1.1544 targeting 1.1500. As usual no fixed stop losses;

 

 

 

 

• As recently reported in my twitter feed @aulafx, from a 900 pip range in EURUSD in nominal terms, this model captured 4852 pips so far this year, on average that's 1213 pips per month. The maximum floating loss was about 26% when effective leverage hit a max of 7 to 1 during the euro spike towards 1.16.

 

 

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