Euro Dollar Strategy: Hand-Picking the Trend

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The Greek Parliament Vote on 22 July

EURUSD and EURJPY are providing us with a renewed entry, similar to the trade alert we issued at the end of June 2015. We would first like to elaborate the risk event that may lead to the corrective gains we are anticipating in Euro Dollar. On Wednesday, 22 July 2015 the Greek Parliament is due to vote on the reforms demanded by Greek creditors. Out of the 300 seats in the Greek Parliament Alexis Tsipras, the Greek Prime Minister requires 120 members to vote in favour of the reforms.  There are concerns Tsipras will be unable to secure 120 votes on Wednesday and increasing expectations for snap elections as early as October. This does not align with the expected gains from EURUSD unless uncertainty will surround the vote or an unexpected event will lead to moderate USD weakness, which will also support our NZDUSD trading strategy.

EURUSD Weekly Chart

Please click on the chart to enlarge:

EURUSD Weekly Chart, 19/07/15

EURUSD Weekly Chart, 19/07/15

EURUSD painted a second right-hand shoulder of the reversed Head-And-Shoulders (H&S) we discussed in June 2015. This is a perfect entry as the price re-tested multiple support levels that contained Euro Dollar weakness. What is concerning is the required protective stop loss order, which is approximately +200 pips. Although the Risk Ratio (RR) is fairly decent we are uncomfortable with such stops as this is a weekly chart and not a monthly chart. In order to capitalize on EURUSD we would prefer opting for a tighter stop, which means we must perfect our entry. We highlight that ‘playing’ with the stops bears a greater risk as the price may trigger the protective stop loss order before reversing in the predicted direction. If that occurs we will not ‘chase’ the market and re-enter.

Our intention was to wait for Monday’s close that may assist us with the location of the stop loss order. However, should EURUSD post moderate gains on Monday it will substantially increase the required stop and dent the RR. We cannot use intraday time frames as no entry is available aside the weekly chart.

We will wait for the opening of the markets and hope for a bearish gap that will reduce the required stop. If a bearish gap is not noted or a bullish gap is seen we will have to exercise multiple trading techniques to determine the optimal location of the protective stop. If the location of the stop cannot be determined aside the +200 pips we discussed earlier we are unlikely to take the trade. We can say that we are expecting EURUSD to retrace lower before reversing and we certainly hope it will be the gap. Otherwise it means absorbing the potential drawdown before the reversal takes place.

The target would be the reversed H&S neckline at 1.1470. The trade details will be sent to you via an email after 21:00 GMT if found relevant. As this is a weekly chart the estimated duration would be 45 days.

EURUSD Trade Alert Details

Entry: Long at market price (1.0832)
Take profit: 1.1470
Protective stop: 1.0745
Risk Ratio: (RR): 1 : 6 (approx.)
Estimated duration: 60 days

21/07/15 UPDATE: EURUSD is trading at 1.0936 at the time of this writing. We are closing 20% of the long trade at market price.

22/07/15 UPDATE: EURUSD is trading 1.0941 at the time of this writing.

Please click on the chart to enlarge:

EURUSD Weekly Chart 22/07/15

EURUSD Weekly Chart 22/07/15

Despite the risk involved as this is a weekly chart we are shifting the protective stop to the entry and close 10% of the long trade at market price ahead of the Greek Parliament vote.

23/07/15 UPDATE: EURUSD is trading at 1.0991 at the time of this writing, supported by news the ELA raised its funding to Greek banks by EUR 900 million.

Please click on the chart to enlarge:

EURUSD Weekly Chart 23/07/15

EURUSD Weekly Chart 23/07/15

We are closing 20% of the long trade at market price, stop remains at the entry.

27/07/15 UPDATE:  EURUSD is trading at 1.1084 at the time of this writing.

Please click on the chart to enlarge:

EURUSD Weekly Chart 27/07/15

EURUSD Weekly Chart 27/07/15

We are closing 30% of the trade at market price and shift the protective stop to 1.0933.

28/07/15 UPDATE: EURUSD is trading at 1.1058 at the time of this writing. We are shifting the protective stop to 1.0980 ahead of the FOMC statement that is due on Wednesday.

30/07/15 UPDATE: Although the Fed did not confirm rates will be hiked in September 2015 Euro Dollar has retraced lower, trigger the protective stop loss order that was shifted above the entry. We have finished the trade with a decent profit.

Euro Dollar Strategy: Hand-Picking the Trend

As EURUSD trade is closed this page can  now be accessed by all traders. Open trades are restricted to members only. We have been proving trade alerts in the Forex market since May 2014.
Euro Dollar Strategy: Hand-Picking the Trend

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Euro Dollar Strategy: Hand-Picking the Trend

                                         Euro Dollar Strategy: Hand-Picking the Trend
Euro Dollar Strategy: Hand-Picking the Trend
                                             Euro Dollar Strategy: Hand-Picking the Trend

Euro Dollar Strategy: Hand-Picking the Trend