The Weekly Update: The Upcoming Trend in EURUSD

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How will the Euro Trend?

As we have anticipated, the German Finance Minister’s remarks on Saturday have titled votes from the YES cam to the NO camp. While the EU officials are trying to indicate Greece will be forced out of the Euro zone we are uncertain this will be the case. We highly doubt the IMF and the ECB wish to have a share responsibility for instigating a financial crisis.

Assuming the ECB will not intervene before 21:00 GMT, we would expect the bearish gap to be corrected in most EUR pairs and crosses in the Forex market. The fundamental trigger is more than likely to be the teleconference meeting tomorrow (which has been recently denied although we suspect it will take place) or a deposit haircut on Greek bank accounts as we have discussed in the Greece Newsroom. Aside the Euro, the retracement is likely to be in seen across the leading indices as well as stocks from the banking sector. We are aware Italian banks were heavily sold in the stock market, which forced their temporary suspension from trading. We highlight Tsipras already made concession in his last proposal to the EU, which includes pension cuts but the Eurogroup refused to discuss this until the results of the referendum.

EURUSD Trading Strategy

in the newsroom we have discussed EURUSD uptrend appears to be intact. In order for us to enter the market we must have a scenario in which the ECB does not immediately act.

EURUSD Weekly Chart

Please click on the chart to enlarge:

EURUSD Weekly Chart, 05/07/15

EURUSD Weekly Chart, 05/07/15

The weekly chart was our reason for taking EURUSD long trade ahead of the Greek referendum. We are aware the Euro Dollar is currently +145 pips lower (approx.), which is still above the support line (in orange). This could provide a fair entry to long EURUSD as we have done last week. There is a strong possibility the support line will be re-tested by the market, which is why the entry can only be determined at the opening price of EURUSD at 21:00 GMT. The target remains at 1.1456 We are dismissing all EU threats that Greece will be forced to exit the Euro.

In a scenario where EURUSD did not trigger the stop loss order of our current trade we will decide whether we wish to increase our exposure.

EURUSD Trade Alert Details

Entry: To be determined
Take profit: 1.1456
Protective stop: To be determined
Risk Ratio (RR): To be determined
Estimated duration: To be determined

EURCHF Trading Strategy

Sadly, we have overlooked EURCHF last time. The Swiss National Bank (SNB) has intervened to prevent steep losses in the currency pair and there is no reason to believe it will not act again. The previous FX intervention by the SNB lifted Euro Swiss by just +100 pips (approx.). From studying past interventions we are aware the central bank has the power to lift EURCHF by over +400 pips if it wishes to do so.

EURCHF Daily Chart

Please click on the chart to enlarge:

EURCHF Weekly Chart, 05/07/15

EURCHF Weekly Chart, 05/07/15

As this is a fundamental entry we relay on prior support levels in the daily chart. Our preferred entry would be on a re-test of the next support line (brown line) or any price level between 1.0308 – 1.0365. The protective stop must be layered below 1.0308 while we decide to target the next weekly resistance (1.0700) in case of a moderate FX intervention. If we are correct, the intervention is likely to take place within the next 24 hours but as we believe many traders are preparing for the SNB to take action the central bank may act when it wishes to.

Please note this trade alert was restricted only to traders that have applied for one of our global trade alerts plan. Join us today to have access to our current and future trade alerts.

Should we decide to opt for indices or stocks from the banking sector we will present them in a different page under ‘Trade Alerts,’ which you will be instantly notified via email. If the ECB does intervene before the opening of the markets we must re-assess our trading strategies.

EURCHF Trade Alert Details

Entry: market price (1.0362)
Take profit: 1.0700
Protective stop: 1.0263
Risk Ratio (RR): 1 : 3 (approx.)
Estimated duration: 14 days

05/07/15 UPDATE: We have executed a long trade at market price (1.0362) in EURCHF, protective stop layered at 1.0263, targeting 1.0700.

Please click on the chart to enlarge:

EURCHF weekly chart II, 05/07/15

EURCHF weekly chart II, 05/07/15



We suspect a bear trap is being setup in EURUSD, which is why we are not entering at the time of this writing. Based on our analysis, Euro Dollar must retrace approximately 60 pips in order to provide a more conservative entry.

05/07/15 UPDATE II: Moderate gains were noted in EURUSD and EURCHF. While we did not take the long trade in Euro Dollar, the strong gains in EURCHF lead us to suspect the SNB may have been active in the market although we were unable to confirm this.

Please click on the chart to enlarge:

EURCHF Weekly Chart III, 05/07/15

EURCHF Weekly Chart III, 05/07/15

We are closing as much as 20% of EURCHF long trade at market price.

06/07/15 UPDATE: EURCHF resumed its gains in the market, trading at 1.0443 at the time of this writing.

Please click on the chart to enlarge:

EURCHF Daily Chart, 06/07/15

EURCHF Daily Chart, 06/07/15

We are closing 20% of the long trade at market price and shift the protective stop to the entry.

08/07/15 UPDATE: EURCHF missed our protective stop by several pips(1.0365) before reversing higher. EURUSD did provide a technical entry following yesterday’s selling, however, we have waited for the daily close for a confirmation but the market recovered since, preventing us from taking the trade.

EURCHF is trading at 1.0435 at the time of this writing. We are closing 20% of the trade at market price. If the SNB has indeed intervened several days ago it may not intervene again.

08/07/15 UPDATE II: We spoke too soon. Recent weakness in CHF that led to moderate gains in EURCHF may have been as a result of the SNB intervening in the market.

Please click on the chart to enlarge:

EURCHF Daily Chart, 08/07/15

EURCHF Daily Chart, 08/07/15

EURCHF is trading at 1.0460 at the time of this writing. We are closing 10% of the trade at market price. Although we were unable to affirm the trigger for the heavy CHF selling, it appears to us the SNB has been active in the forex market.

08/07/15 UPDATE II: EURCHF is trading at 1.0507 at the time of this writing. We are closing 10% of the long trade at market price and shift the protective stop to 1.0400.

Please click on the chart to enlarge:

EURCHF Weekly Chart, 08/07/15

EURCHF Weekly Chart, 08/07/15

There is a fair possibility we may close the trade ahead of the take profit.

09/07/15 UPDATE: We are closing EURCHF trade at market price (1.0496). We have ended the trade with a decent profit.


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The Weekly Update: The Upcoming Trend in EURUSD
                                         The Weekly Update: The Upcoming Trend in EURUSD

The Weekly Update: The Upcoming Trend in EURUSD

                                             The Weekly Update: The Upcoming Trend in EURUSD

The Weekly Update: The Upcoming Trend in EURUSD

Last Updated on July 19, 2015