[TW] 02-20-2012 - EUR/GBP Long by Justin Pipper

Long or Short: Long

Entry Point: Long at market

Stop loss: 82.50 (below solid range and former lows)

Profit target: 84.00 (top of the range, big “00” number)

Risk Percentage: 1.0%

Reward-to-risk Ratio: 2:1

Tools used: Stochastics

Trade Rationale:

Optimism on a new bailout package for Greece could keep the euro well supported next week. Also, the range on the 4-hour chart hasn’t been broken since December 15 last year if you don’t count the brief fall in January 9. Right now the range is also showing a nice bullish divergence with Stochastics still in the oversold territory.

Trade Adjustment:

I will enter at market as soon as the markets open next week. I will probably add another position with a tighter stop if it reaches the bottom of the range. I will move stop to break even as soon as price hits the middle of the range.

Hmmm… I’m skeptical about this one. Seems to easy, except for one thing…we have been here many times over the last few months, each time…talks fell apart. I think there will be delays, more bumps in the road, and let’s not forget the article on zero hedge this week about the legal action already underway. A 50%-70% haircut is somehow NOT a default? I doubt the creditors and CDS owners will accept that, not will the Greek people accept allnof this austerity. They are already rioting, and when their economy slows even further and more people feel the pain, the protests will get worse, and the riots more violent. We are talking about a country thatnsets huge fires to itself each year…