Tuesday, October 12, 2010

Trade of the month - EUR/USD - Oct 12, 2010




The condition is now prime for shorting the EUR USD. A big correction in the dollar should be at hand. A break in the 60 Minute 200 SMA would coincide with a clean break on the 7 Day SMA daily leaving an open range all the way down to 1.35. I would target 1.368 in the intrim via range analysis post FOMC in 1 - 2 days. If the FOMC noise exaceberbates the beggining of the down trend 1.35 may come in a blink of the eye. 

The last evidence #3, is the candle stick analysis of the past 3 days on the daily chart plus MACD cross and FINALLY the RSI pulling back into less than 70 range. Also to note on chart #2 the peaking of of volume indicates a possible smooth down trend reversal if the volume maintains from here out with no surprises.

The only risk to this technical landscape would be if the recent negative sentiment completely reverses or if the FOMC completely surprises and says something ridiculous like no QE and an exit strategy is underway. However, I find that unlikely to happen as with the November elections in sight, fed speak will be tame and typical. TT ... TT ...


It seems to me that no mans land has been between 1.38 and 1.40. Gun below the SMA's and you should be good for free falling.


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