Euro-Dollar, DAX30 and SPMIB40 Trading Strategies, February 2015

Greece and the EU

We can now understand Finland’s demand for the Greek islands to be held as a collateral in a scenario the debit is not paid in full when the first bailout was initiated. The rise of Alexis Tsiparas is not surprising at all as we are fully aware of the horrendous side effects of the bailout conditions, which is reflected in a sharp rise of the suicide rate in the debt-ridden nation. Based on our research, Greece is demanding a haircut of approximately EUR 100 billion that will relieve some of the harsh austerity measures that were forced on the country. The European Central Bank (ECB) brought forward the bailout extension from the end of the month to today, 11 February, 2015, which is likely to intensify the emergency EU meeting that is due to begin at 17:30 GMT. We remind traders that the EU summit will be held on Monday, 16 February, 2015.

Market speculations that Greece will receive an extension of 6 months to the bailout has been denied by the German Finance minister but fresh speculations suggest the ECB will accept Greek bonds as a collateral.  We expect more speculations and leaks around a possible solution as enter the US session, which is likely to trigger extraordinary volatility in multiple markets. There is a firm possibility no decision will be made in the emergency meeting, in which case the focus will be shifted on the EU summit that is due to be held next week. Our trading strategy will focus on European indices and the Euro in the Foreign Exchange market.

SPMIB40 Technical Analysis

The daily chart has painted top Head-And-Shoulders (H&S), suggesting a firm reversal may be seen in the index. Please note this is a volatile index, which requires a hefty stop loss order but compensates through a decent Risk-Ratio (RR):

SPMIB40 Daily Chart

Please click on the chart to enlarge:

SPMIB Trading Strategy, 11 February. 2015

SPMIB Daily Chart, 11/02/15

At the time of this writing, the SPMIB40 has shed over +100 points, which will make our short entry rather difficult as the stop loss order size has been substantially increased. Our bearish target is seen at 19,865, protective stop layered at 20,995. If a trade is executed at market price, we can experience a ‘kick’ of 250 points against us, which will not negate the bearish strategy for the Italian index. We are nevertheless executing the trade at market price. A conservative entry may be at 20,730.

DAX30 Technical Analysis

Similar to the SPMIB40, top H&S was also noted in the daily chart, which may paint a scenario where hefty losses may be seen across the European indices.

DAX30 Daily Chart

Please click on the chart to enlarge:

DAX30 Trading Strategy, 11 February, 2015

DAX30 Daily Chart, 11/02/15

The protective stop loss order is layered at 10,906, targeting 10,340. Gains may be seen towards 10,885 before the technical retracement may take place, which is why we locate the protective stop loss order above the right-hand shoulder.

EURUSD Technical Analysis

Unlike the indices, we actually entertain the possibility of moderate gains in EURUSD as opposed to many strategies that were published by many respected firms. The ‘Piercing’ reversal pattern on the weekly chart is a strong indication that moderate gains may still occur in Euro-Dollar.

EURUSD Weekly Chart

Please click on the chart to enlarge:

EURUSD Trading Strategy, 11 February, 2015

EURUSD Weekly Chart, 11/02/15

For the EURUSD technical strategy, the protective stop loss order is layered at 1.1170, targeting 1.1680.

Updates regarding the above trades will be published at the bottom of this page when found relevant. If you wish to be instantly notified when a trade update is released please contact us.

11/02/15 UPDATE: EURUSD is trading at 1.1330 at the time of this writing as great volatility is seen in the market at the time of this writing. No action is taken.

12/02/15 UPDATE: The market reacted positively to the ceasefire news (reported on Reuters) between Russia and Ukraine, which triggered the protective stop loss order for our short trades in the DAX30 and SPMIB40. EURUSD is trading at 1.1341 at the time of this writing.

12/02/15 UPDATE II: EURUSD is trading at 1.1399 at the time of this writing. We are closing 20% of the long trade at market price and shift the protective stop to the entry. The trade alert is now available to all traders.

16/02/15 UPDATE: After trading at 1.1427,  EURUSD is traded at 1.1388 at the time of this writing. Traders are cutting their EUR exposure ahead of the Eurogroup press conference and we see no reason to join them. We are closing 25% of the long trade at market price.

24/02/15 UPDATE: EURUSD triggered the protective stop loss order at the entry. We have finished the trade with a decent profit and focus on our future trades in the pair.

If you wish to have access to our trades alerts in the spot forex market when they are released you may apply for our monthly global trade alerts package. Traders that applied for the package are instantly notified when an update is released.

Last Updated on March 28, 2015