I'm giving EUR/USD another shot today. But hopefully, unlike my trade idea last week, I won't miss the move with this day trade setup.
On the 15-minute chart, we see that the pair is just consolidating between 1.2600 and 1.2550. In fact, you can even say that there is a bearish pennant in the making. I learned from the awesome School of Pipsology that this chart pattern usually signals that the pair is about to breakout lower so I will wait for price to pierce through the support at the rising trend line.
I think selling around 1.2550 and aiming for the 1.2500 handle with a 50-pip stop is a good idea. But as usual, I won't pull the trigger nor will I set an order until I see the fundamentals align with my trade idea.
Since this is a day trade, I'm mostly concerned with the economic reports coming out rather than the entire macroeconomic picture. Specifically, I'm keeping a close eye on the purchasing managers' indices that are scheduled to come out later. If those reports fail to meet expectations, I suspect the euro will get sold-off again.
With that said, here's my game plan:
Short EUR/USD at market when PMIs come in worse than expected, stop loss at 1.2605, profit target yet to be determined. Risk Disclosure.
As for my EUR/USD trade, well it stopped out... at breakeven. Whew!
I pulled the trigger as soon as I found out that the French PMIs came in worse than expected. However, it wasn't until after the German PMIs were reported that EUR/USD closed below the bearish pennant that I pointed out.
Since it was just a day trade, I figured that I could either take profit or move my stop from 1.2605 to breakeven a little after the reports were released. I chose to just move my stop to breakeven when I saw that my unrealized RR was already over 1:1, thinking that the disappointing figures would be more reason for bears to push the pair lower, possibly all the way down to my profit target at 1.2500.
However, I was wrong. EUR/USD quickly traded back up and stopped me out.
I'm not so bummed out though! I know some of you may disagree, but I still think I deserved the pat on the back that I gave myself for moving my stop to breakeven.
Sell EUR/USD at 1.2570: stopped out at breakeven
There ya go! That's how my week went down. How did you guys do? Update me!