LOOKING TO FADE INTRADAY BREAKOUT ABOVE 20-DAY SMA
Fundamental Catalyst – The Euro has been well correlated with US equities of late and any sense of an increased risk appetite and bid back into equities should help to bolster the major currency. However, as has been the case throughout the global financial crisis, rallies in the equity markets should only be used as opportunities to build on existing shorts, with the renewed optimism more often than not, reliably shot down quickly and abruptly.
Techs – The Euro has been well capped on a close basis below the 20-Day SMA for the entire 2009 and until a close above can be established, intraday rallies towards and above the 20-Day should be used as opportunities to build on existing short positions. With the market already trading above the 20-Day ahead of the US session of trade, scope exists for additional upside over the coming hours. We will look to take advantage of an overdone rally today to look to get back into the overriding bear trend. We realize our entry is well off of current levels, but should the market breakout today, we want to put ourselves in the best possible position for a compelling risk/reward setup. If the trade does not trigger, we will look for new opportunities on Wednesday. Strategy: SELL @1.2920 FOR A 1.2580 OBJECTIVE, STOP @1.3020. Stops to be trailed to cost on a break back below 1.2870. If trade triggers and 1.2870 not broken, position to be closed out at NY close (5pm EST) on Tuesday. Recommendation to be removed if not triggered by NY close on Tuesday.
Written by Joel Kruger, Technical Currency Analyst for DailyFX.com
If you wish to receive Joel's reports in a more timely fashion, e-mail jskruger@fxcm.com and you will be added to the "distribution" list.
Joel Kruger publishes 6 daily pieces:
“Tech Talk” – A Daily Video Highlighting Technical Developments in the Overnight Session of Trade.
Monday-Friday (between 5:30am-6:30am EST)
“Morning Slices” – Morning Overview using Fundamental, Technical, Flow, and Quantitative Analysis (Includes “Trade of the Day”).
Monday-Friday (between 6:30am-7:30am EST)
“Indicator of the Day” – A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
Monday-Friday (between 8:00am-9:00am EST)
“Cross Country” – A Midday Fundamental Update, along with Technical Analysis of Selected Cross Rates.
Monday-Friday (between 10:30am-11:30am EST)
“Scandi Daily” – A Specialized Daily Fundamental and Technical Overview of the Nordic Currencies. (This report is only distributed through email. Please contact Nordic@fxcm.com if you would like to be added to distribution.)
Monday-Friday (between 11:30am-12:30pm EST)
“Daily Classical” – A Daily Technical Overview of the Major Currencies.
Monday-Friday (published between 2:00pm-3:00pm EST)
