Short Eur/Usd at 1.3833
Posted by themarketanalyst on October 2, 2008
Another opportunity presents itself on the 30min chart. Here we observe a perfect bearish price channel. We could expect this trend to continue with resistance at the upper trendline. The downtrend should continue withoutly completely canceling out the big candle at 2:30pm EST. We will place the stop order at the previous support of 1.3885, which is now resistance. Remember, this breakout took place as soon as the Trichet speech indicated a possible rate cut. This was a significant event and unless there are no surprises we do not expect the move to be given back.
There were some negative U.S. economic indicators but they did not generate much of an immediate impact. So we have two resistance levels, at the upper trendline and at 1.3885.
30min chart
We place the limit order at 1.3770 and if this short-term trend continues we could remain alert to lower both the stop and limit orders.
UPDATE: closed at 1.3885 for a 52 pip loss at 1:27AM EST. Our limit order was barely avoided (1.3772 vs. 1.3770). The bearish price channel remained intact throughout the night as it flirted with the upper limit before breaking out. If our stop order was a tad more conservative we would have closed out at 60 pip gain.
