01/12/2010 POTENTIAL LONG IN THE EURUSD, 01.14.2010 ABANDONING THIS TRADE SINCE AREA HAS NOT BEEN HIT.
I am staring at the EURUSD pair and seeing that there is a potential countertrend trade setting up. 
On the daily chart, I see the EURUSD pair is below the 55 day EMA which tells me that the pair is in a down trend. However, looking at the recent moves in the past few days, there have been higher lows and a higher high. Placing a Fibonacci retracement on the chart shows a possible retracement back to the 50% Fib retracement which happens to be right near the 55 day EMA. I want to make this a countertrend trade by going long.
After boiling down to a 4 hour chart, I placed more Fibs on it to see what would be a good entry point. 1.4410 is right in between Fib retracements on the daily as well as the 4 hour chart so I
am going to place me entry near 1.4410. My stop loss is going to be 1.4340, or 70 pips below my entry. I am going to set my T1, T2 and T3 based upon my 4 hour chart and you can read the text on that chart by clicking on the chart to the right to enlarge it.
The reason why I want to enter this trade is:
1. The USD index had made a strong move to the upside and above its 50 day MA and is retacing now. I expect it to retrace near $76. I believe this is correlative with what I am seeing on the EURUSD pair. If the USD weakens, the EURUSD pair with rise. (i.e. it is as if the denominator is getting smaller/weaker)
2. I have seen higher lows and a higher high in the past few days on the EURUSD.
3. I am relying upon a Fib retracement on the daily chart near 1.4428 and on the 4-hour chart at 1.4409.
UPDATE: 01.14.2010
I was never filled in on this trade and by the looks of the chart, I am not going to enter it as I have seen the EURUSD pair move back into the channel line with very little conviction. Here is the chart to see what has occurred.
On the daily chart, I see the EURUSD pair is below the 55 day EMA which tells me that the pair is in a down trend. However, looking at the recent moves in the past few days, there have been higher lows and a higher high. Placing a Fibonacci retracement on the chart shows a possible retracement back to the 50% Fib retracement which happens to be right near the 55 day EMA. I want to make this a countertrend trade by going long.
After boiling down to a 4 hour chart, I placed more Fibs on it to see what would be a good entry point. 1.4410 is right in between Fib retracements on the daily as well as the 4 hour chart so I
am going to place me entry near 1.4410. My stop loss is going to be 1.4340, or 70 pips below my entry. I am going to set my T1, T2 and T3 based upon my 4 hour chart and you can read the text on that chart by clicking on the chart to the right to enlarge it.
The reason why I want to enter this trade is:
1. The USD index had made a strong move to the upside and above its 50 day MA and is retacing now. I expect it to retrace near $76. I believe this is correlative with what I am seeing on the EURUSD pair. If the USD weakens, the EURUSD pair with rise. (i.e. it is as if the denominator is getting smaller/weaker)
2. I have seen higher lows and a higher high in the past few days on the EURUSD.
3. I am relying upon a Fib retracement on the daily chart near 1.4428 and on the 4-hour chart at 1.4409.
UPDATE: 01.14.2010
I was never filled in on this trade and by the looks of the chart, I am not going to enter it as I have seen the EURUSD pair move back into the channel line with very little conviction. Here is the chart to see what has occurred.
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