Keep it Comin'!

Usually the first couple of hour in the afternoon early evening holds little activity, today is different. Most of the gains on the 3 open trades showed up after the 5pm est rollover. At the time of this post the Eur/Cad trade is now 123 pips up. The Eur/Usd trade is up 104 pips. The Eur/Aud trade is up 34 pips, remember that the Eur/Aud is also getting about $1 in interest to boot. All in all a fantastic couple of days. I am feeling rather exposed on the Euro. I like the fact that there are 3 different trades, in essence long the USD, long the AUD and long the CAD. I don’t like that I am short the Euro 3 times over. Spreading out sentiment of one currency across varied pairs is a good strategy if your intension is to reduce risk of a single trade but to trade longer term. To give ample opportunity to continued trend and possible reduce my short Eur exposure. I am going to tighten stops slightly, not too much like last time but a little. I will tighten my stops to 115 of the current price on the Eur/Cad and the Eur/Usd. I am leaving the Eur/Aud unchanged as it hasn’t moved very far and I am trading it for a longer term trade and interest payment as well.

Now, much to my surprise, oil finally closed below $58 for the first time since June of this year. Stubborn as I am, I am not convinced this is the break out. If it is a break out of the head and shoulders pattern that formed over nearly 5 months, we could expect oil to slide potentially down to $46 over the next 5 months. IF oil drops further tomorrow, I would also expect the Gbp/Usd to also complete a head and shoulders pattern and drop 800-900 pips potentially. That kind of move is possible If and only IF oil drops and IF the Gbp/Usd confirms a breakout of the head and shoulder (10% of target ~1.7300-ish).

Other setups are forming. More to come.