[B]My picks:[/B] EURGBP Short
[B]Expertise:[/B] Combining Money Management with Technical and Fundamental Analysis
[B]Average Time Frame of Trades:[/B] 3 days to 1 week
Flagged trends have been a common sight over the past few weeks; but for some pairs, congestion has been the mainstay for much longer. Last week, I was following EURCHF. This pair has had volatility anchored for nearly three months through fundamental and technical means (though the economics behind it are likely more responsible for the temperance of momentum). My setup was for a bullish breakout above 1.5225, which has yet to trigger. The market is still waiting for a clear divergence in the economic paths of the Euro Zone and Switzerland. I will maintain my readied stance for a confirmed break above 1.5225 and will expand it to a confirmed close below 1.50 (though I would prefer the former).
Another pair that is no stranger to range conditions is EURGBP. This pair has seen numerous, promising breakout scenarios immediately drop momentum and loose all trend potential. Therefore, I have to approach the potential shift in trend with caution. However, ignoring the chance of a developing a new trend could keep me out of a promising setup that offers comparatively modest risk. Looking for fundamental inclinations, there are no specific peices of event risk on the docket to spur momentum (nor produce an untimely reversal). On the other hand, the long-term fundamental balancing between the two economies make the relatively extreme level of the exchange rate all the more circumspect. Establishing my position, I will look for a better price on entry with a bounce back to 0.8575 for my short. A stop will be placed 100 points above (these are pound pips) with position size adjusted for risk considerations. The first target will equal risk at 0.85 and the second will be much more aggressive at 0.8055. If this pair gathers speed before entry (hits 0.84) before entry, I will cancel my orders.