§ Currency Pair: EUR/GBP
§ Entry Zone: Go both long and short at the market if the price is at any level within the 0.6800-0.6835 range
§ Protective Stop: Long stop below 0.6771 and short stop above 0.6867
§ Profit Target: Long Target at 0.6835 and Short Target at 0.6800
§ Profit Potential: 35 pips (excluding transaction costs and slippage)
The most effective way to capitalize on currencies pairs that are trapped in tight ranges is through the use of hedging. The hedging feature is currently available on all accounts using FXCMs No Dealing Desk service. For more information on FXCM hedging strategies please visit http://www.fxcm.com/hedging.jsp
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The EUR/GBP is our primary target for hedging in the week ahead, with clear range-bound trade and concrete support and resistance levels. To hedge, go both long and short at the market if price stays within the above Hedging Zone. Take profits at R1 for longs and at S1 for shorts, covering losses above R2 or below S2. <B style=“mso-bidi-font-weight: normal”><I style=“mso-bidi-font-style: normal”>
HEDGING RADAR - Find More Hedging Opportunities
Rules for the Hedging Radar
1)Entry Zone -> Go both long and short at the market if the currency is at any level within the Hedging Zone.
2)Profit Taking ->Target for the long order is the top of the entry zone, for the short order is the bottom of the entry zone.
3)Stop Levels are Key Support and Resistance Points -> Place the actual stops a few pips above the higher level and a few pips below the lower level. The break of these levels signals that the ranges have been broken and the hedging strategy should no longer be implemented.
4)The lower the Average True Range, the Less Risky the Currency is for Hedging.
[B] Low Risk Hedging Opportunities - Currencies that are Ranging
Currency
% ATR Rank
Stop for Long
Hedging Zone
Stop for Short
Profit Range (in Pips)
EURCHF
|||||| 0.35%
1.6367
1.6462
1.6533
1.6628
71 pips
EURGBP
||||||||| 0.46%
0.6771
0.6800
0.6835
0.6867
35 pips
GBPCHF
|||||||||||| 0.50
2.4000
2.4144
2.4305
2.4597
161 pips
EURUSD
|||||||||||| 0.55%
1.3495
1.3585
1.3653
1.3705
68 pips
EURAUD
|||||||||||| 0.65%
1.6350
1.6400
1.6500
1.6550
100 pips
[B]Medium Risk Hedging Opportunities - Currencies that are Volatile[/B]
[B]Currency[/B]
[B]% ATR Rank[/B]
[B]Stop for Long[/B]
[B]Hedging Zone[/B]
[B]Stop for Short[/B]
[B]Profit[/B][B] Range[/B][B] (in Pips)[/B]
USDCAD
||||||||||| 0.66%
1.1028
1.1048
1.1133
1.1246
85 pips
GBPUSD
||||||||||||| 0.67%
1.9822
1.9914
2.0060
2.0131
146 pips
AUDUSD
||||||||||||| 0.70%
0.8150
0.8233
0.8337
0.8390
104 pips
CHFJPY
||||||||||||| 0.71%
98.05
98.34
98.82
99.05
48 pips
USDCHF
||||||||||||| 0.72%
1.1875
1.2000
1.2185
1.2281
185 pips
[B]High Risk Hedging Opportunities - Currencies that are Trending[/B]
[B]Currency[/B]
[B]% ATR Rank[/B]
[B]Stop for Long[/B]
[B]Hedging Zone[/B]
[B]Stop for Short[/B]
[B]Profit[/B][B] Range[/B][B] (in Pips)[/B]
EURJPY
|||||||||||||| 0.75%
162.40
162.80
163.36
164.05
56 pips
USDJPY
||||||||||||||| 0.77%
117.60
118.26
120.28
122.17
202 pips
GBPJPY
||||||||||||||||| 0.88%
235.96
238.15
240.00
241.39
185 pips
AUDJPY
|||||||||||||||||| 0.91%
96.81
97.42
99.51
100.02
209 pips
NZDUSD
||||||||||||||||||| 0.97%
0.7313
0.7362
0.7435
0.7491
73 pips
NZDJPY
||||||||||||||||||||| 1.22%
86.70
87.40
89.00
89.55
160 pips
[I]
[/I]
**How is the % ATR Rank Calculated?
The average true range is the 90 days moving average of the currencys true range. The true range is the greatest of: the difference between the current high and the current low; the difference between the current high and the previous close or the difference between the current low and the previous close.
The %ATR is the relative value of the ATR when weighted against the price. For example, if the ATR for the EURGBP is 26 pips then the %ATR is 0.4 percent since 0.0026/0.6602 = 0.4% where 0.6602 is the quoted price of the EURGBP.
For more information on FXCM hedging strategies please visit http://www.fxcm.com/hedging.jsp
[/B]