[B]My picks:[/B] Short EURCAD
[B]Expertise:[/B] Combining Money Management with Fundamental and Technical Analysis
[B]Average Time Frame of Trades:[/B] 3 days - 1 week
In the past week, I have notched up considerable exposure to the euro. My setup for a EURCHF breakout from last week still stands with a move above 1.5225 or below 1.50 signaling entry. And, though I have set conditions for an unfolding of the extended congestion pattern to either side of its range, the favorable outcome would be for a bullish break. Considering European officials refusal to extend rescue efforts, the uncertain health of the Eastern regional banks, the SNB’s vow to keep its currency from appreciating and the technical room to for the exchange rate to run; the air above resistance looks clearer. Elsewhere, I further established a setup for EURUSD yesterday. This position was triggered with a close below 1.38 (ultimately at 1.3782); but follow through was obviously lacking after the break; and the over-extended range forged through the morning hours would necessitate a retracement. Using the Fibs from the Jun 11th to 15th decline, my stop was set at 1.3955 and my position was set at half its usual size (to compensate for the high notional risk. We will soon see whether this is a genuine rebound into range or a pullback before bearish continuation.
In the meantime, I am looking at another euro cross - EURCAD. This presents danger as it leverages my short-side euro exposure (as I am already short EURUSD). Unlike EURUSD however, this cross is a passive setup (meaning, I am not betting on heavy momentum or breakout conditions which prompt the market to action). Resistance around 1.57 is my primary concern and is defined by a steady, falling trend and fib confluence as well as a series of highs. There are no major indicators from either the Euro Zone or Canadian dockets that threaten a major breakout nor does risk appetite have a particularly heavy influence with this rate. Nonetheless, positioning should account for the risk of a breakout. I will set entry orders at 1.5675 with stops set above this month’s highs at 1.58. This is significant notional risk; so I will adjust position size to make it a reasonable exposure. The first objective will equal risk at 1.5550 and the second will be set at 1.5450 (this is aggressive as it at the very bottom of the recent range; and considering I am not trying to forecast a break in this direction as such a decision could take a long time to occur).