March 26 - April 2, 2010

EURUSD long at 1.3325 SL 1.3225 TP 1.3500

We are looking at positive movement here as the Greek issue has supposedly been resolved, and they have received the backing of both, German and French govts., which also means that Spain, Italy and Portugal have access to the same life-support in a worse-case-scenario.

We also need the stock markets and commodities to fuel this surge back up. We expect this to be a simple retrace and not a change of the trend.

Those of you with long term perspectives may want to close half or a third of your orders at the 1.3450 - 1.3500, which is where we expect the first line of real resistance. Once you have bagged some profits, considering the market momentum, you want want to set your sights on 1.3600 and 1.3800. We still have our short order from several weeks ago sitting, very lonely, at 1.4000.

Europe is not out of the woods yet - this will happen only when their banks come clean and start the massive write offs that they have been trying to sweep under the carpet. The also need to recapitalize which they were hoping to do from profits, but that will not be enough. They need to catch up the house cleaning with the US and UK banks, and soon. They are the only ones (and some large Asian banks) left still carrying the toxic paper from the GFC (Great Financial Crisis).

The long term outlook for the Euro is 1.15 - 1.20 or even lower perhaps in the next 12 - 24 months. By this time, the US debt will start taking its toll on the US Dollar index and we can look forward to a trend reversal.

Levaz

GBPUSD long at 1.4901 SL 1.4801 TP 1.5000 with an extension to 1.5300

The GBP is likely to follow the Euro on its retrace, with EURGBP strength being the X-factor.
Yet again, this trade is basically a copy of the EURUSD trade, so no need to double expose your accounts, if you really don't want to.

Just a word of warning, the uptick ion Friday could simply be a knee-jerk reaction, and could head-fake us. We have been waiting for a sizable retrace, so we have to check every possible turn.

If you look at the Daily charts, it looks like the GBP has bottomed out at 1.4800. If this level breaks down, I would SELL with short term targets of 1.4500, and then 1.4100

Neither of our above trade were picked up - please cancel them.
We do not want to have them picked up when the pairs are headed down!!

EURUSD long at 1.3430 SL 1.3397 TP 1.3530
GBPUSD long at 1.4939 SL 1.4839 TP 1.5039

You may want to look out for the Yen crosses.
EUR, GBP and USD are at resistance. You want to short at the highs - 124.50 for the Euro, 139.50 for the GBP and 93.00 for the USD with tight 50-100 pip stops. If you are stopped out, then they have all broken the resistance line, and you should be able to recover your losses, and make a profit by immediately reversing your positions.

Remember, that the Yen is not for the faint hearted.

Yet again, the market did not come to out preferred entries. No worries, cancel those orders.

Today we have:

USDCAD short at 1.0180 SL 1.0255 TP 1.0080

Tomorrow is a big news days for Canada, and the numbers show that Canada is the fastest to emerge out of the GFC. If tomorrows numbers confirm this yet again, we should get our TP rather quickly.

We have already entered the trade at current market prices of 1.0189

EURGBP short at 0.8953 SL 0.8987 TP 0.8903

It appears that there is divergence between the EURUSD and GBPUSD, and we expect this momentum to continue.

Along yesterdays lines for the Yen crosses, the GBP has broken through 140.00
Now this may be a fake break out, but if not, 144.00 is well within realistic sights.
This will help our cause with the EURGBP trade provided we get picked up at our preferred entry.

Levaz

Our charts show that the current moves will continue for another day, but they are far into the moves and close to potential resistance lines for us to get into any new trades for now.

We do have one potential, provided our order gets filled:

GBPUSD long at 1.5100 SL 1.5050 TP 1.5200

The USDCHF trade which was entered into midday without support of end of day analysis, may be headed for a rough ride. However, once again, we are close to the proven support lines around 1.0475 - 1.0500. Note that there has been a slight break of 1.0500, which had not occurred for several weeks (last time being Feb 3rd 2010 at 1.0497). We have two choices here, we can either place a SL at 1.0490,today's low (1.0450 for those of you who really want to give some room) OR we could let it run a little and hedge the trade at the same level i.e., 1.0490. Remember that while Europe may still be in trouble, the Swiss Franc has been outperforming for a while now, even against the USD.

The EURUSD is fast approaching the 200sMA on the 4H charts and not far away from a fast dropping 100sMA on the Daily charts, so we must prepare to short the EURUSD soon. My preferred entry would be around 1.3700, but I not sure whether this retrace will reach that high, as it has been reject already at these levels. I have a pending order to short at 1.3700, SL 1.4000 TP 1.3300
If the Euro does fizzle out before our preferred entry point, we will get in at 50 pips below what ever the highest level will be. 50 pips gives us an indication of decent momentum behind the trend continuation.

Do not be in a rush, we need to observe the price action and make decisions accordingly. If we miss this, there will be others in the next couple of weeks.

The Stop loss of 1.4000 is just so that we do not get taken out at 1.3800 or 1.3802 or something silly like that. But, we do have to put a stop to this trade if it looks like it will push past 1.3850.
Keep that in mind.

Also, if and when this trade works out, it will have a direct impact on our USDCHF trade as well.


Levaz

On a side note, there is a possibility (and high expectation) that the SNB WILL intervene. They have been sitting quiet for some time since their last statement that they will no longer intervene in the market. Normally, an official denial is a sure sign that the party involved wants to throw the markets off as they are being too predictable.

My plan is to place a a buy order at the nearest round figure which is at least 100 pips above the current market levels. SO as of today, we have the EURCHF at 1.4205, which lows of 1.4187 recorded as of last night. So we are looking to get in at 1.4300 with a 100 - 300 pip profit target. The amount of pips you want to risk waiting for is your decision, as we do not know just how much the SNB will do to protect their currency. You will have to keep tweaking this entry point based on price action, however, once you have an entry, say 1.4300, stick to it unless the market moves even lower, then we have to re-evaluate our entry point again.

There is of course the chance that they WILL stick to their guns and let the market resolve the situation, which is why we picked 100+ pips away from the lows as a safety to avoid any minor market movements. Anything above a 100 pip recovery should be easily credited to SNB intervention.

Levaz

We can enter that short now:

EURUSD 1.3700 SL 1.3850 TP 1.3400

While keeping a trade open over a long weekend is not my preferred choice. We may miss the boat if we wait too long. We may have to give some more room on the SL may be up to 1.3900/1.4000 being that tomorrow will be a day of lower than normal liquidity AND they are still going to release the NFP numbers.

You may want to wait till AFTER the NFP numbers to enter the trade. If the ADP numbers form yesterday are to be trusted, the NFP is not going to look good, and that was supported by comments today about unemployment numbers being intolerable for a while longer.

If you do not want to risk being stopped out, then you have to wait for the pair to pass our desired entry point, by say at least 30 - 40 pips and then enter a Sell Stop.

It is best to stay out of trading till about 45 - 90 minutes AFTER the news release.

Levaz