Thursday 24th September 2009

We had a significant retracement in the Eur/Usd yesterday because of dollar-positive news from the Fed. The move took a break at the 1.4692 support line where it bounced back in the upward direction. As of 7:30am BST (London time) this morning we are yet to see if this move will be sustained.

Well, we're now approaching 8:30am and price has continued in the upward direction so far. We encountered some resistance around 1.4768 (which is a significant Resistance level). If this level is eventually breached, I would consider taking a Long position albeit in a conservative manner.

The Long trade played out conservatively just as I suspected it would. If you entered around 1.4770 (10:30am), you could have exited the first position around 1.4790 (1:45pm) with the second position closed out at entry.

There's now a downward move in play fuelled by more dollar-positive news: Jobless claims figures dropped unexpectedly for a third straight week. I'll be looking to enter a quick Short trade if the Eur/Usd breaches it's 89 SMA which could happen any moment from now (3:00pm)!

The Short trade played out excellently. If you were able to enter around the time I made the call, you'd be swimming in about 100pips by now. A good entry was at 1.4761 (a close below the 1.4768 support) following divergence and dollar-positive news. First position would have been closed out at 1.4730. The second position would still be open with stop adjusted to 1.4671.