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Medium term
Trade view / 21 September 2016 at 7:22 GMT

Outlook on the USD and my EURGBP short position

Analyst / PIA First
United Kingdom
Background

USD Index – I am long the USD via EURUSD (short), AUDUSD and NZDUSD. All have posted a bearish signals yesterday or this morning. 

The reverse Head and Shoulder pattern has broken to the upside in overnight trade but we are stalling at the previous high of 96.25 (August 31) so there is scope for a mild retest of the breakout level in morning trade. The measured move target for this formation is at 98.47.
USD index 1
Source: Saxo Bank 

However, we really do need to see a sustained break of the overnight high or we could move lower to form an ascending triangle pattern. It is definitely a ‘hero or zero’ day! Roll on the FOMC (Federal Reserve).
USD Index
Source: Saxo Bank 

Moving away from the UDSD, and I have now got two units short in EURGBP and here is why: 

Monthly – Broken out the channel formation to the upside. However, we have stalled close to previous high of 0.8605 (February 2013) and there is ample scope for a correction lower. Reverse trendline support is seen at 0.8075. Channel support (or possible right shoulder) at 0.7640
EURGBP M
 Source: Saxo Bank 

Weekly – Completed a bullish Elliott Wave five pattern at 0.8723 while posting a Bearish Evening Star on the weekly timeframe. We have seen a move to the upside after the cross bounced from our bespoke support area at 0.8316-0.8354.
EURGBP W
 Source: Saxo Bank 
 
Daily – We have stalled close to the previous high of 0.8625 (July 6, 2016) while posting a Spinning Top type candle on the daily chart. We also have a Demark correction 9 count in this timeframe. We are looking for a possible bearish Head and Shoulders pattern to build. This will be confirmed with a break of the neck line at 0.8377. The full measured move target would be 0.7960.
EURGBP D
 Source: Saxo Bank 

This is medium-term outlook. 

Management and risk description

A move through 0.8500 and we will move stop to entry

Parameters

Entry: short 2 units at an average of 0.8600

Stop: 0.8631 in 1 unit , 0.8725 in 1 unit

Target: 0.8075 and 0.7960

Time horizon: before year end

— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more
21 September
AlexF AlexF
Ian long USD ? You had a video yesterday to short USDJPY right ?
21 September
AlexF AlexF
Im short USDJPY based on Saxo CIO advise but doe snot feel confortable holding it too long where are u in USDJPY ?
21 September
AlexF AlexF
got in at 102.6 moved my SL at 102
21 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
I think it a great day trade. You could try to bleed it over FOMC... I am mildly bullish on the USD going into the decision
21 September
AlexF AlexF
Ok thanks like the bleeding but probably will close before hand or put a tight SL.
21 September
AlexF AlexF
Out of short looking for next direction ...
21 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
well done
21 September
Andrew Perkins Andrew Perkins
I'm in up to Fed meeting 7pm
21 September
AlexF AlexF
Hi Ian pitty I did not bleed it : ( it looks like now it is sitting at 100.63 USDJPY what break out level on both side would you put as target to enter ? +/- 0.5 % for example ?
21 September
AlexF AlexF
this is of course in anticipation of fed decision with no clue what will come out
21 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
I am holding out for a hike... I know I am against the market. I like other USD pairs to short and crosses. Think if you want to play JPY then selling EURJPY or AUDJPY will be good (through the figures). This is because it will e bad for stocks

I think the best pair is EURUSD..... this last move being a mild three wave correction.

Think EURCHF might do down so no to buying USDCHF... EURGBP down .. so no to buying GBPUSD..

I think EURO will weaken against just about everything .......

If they hike ... the trading a break at 1.1135 looks good (don't know if you'll get filled there !! )
21 September
AlexF AlexF
Would be tempted via a forex call option on usdjpy also to edge my equity portfolio in case of hike trying to find one that makes sense
21 September
AlexF AlexF
for a spike on rate hike would you go USDJPY/USDCHF/NZDUSD ?
21 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
NZDUSD out of those three ... got RBNZ so could get 'double bubble'

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