Crazy Monday for the EUR/USD

An article by Gus

Hey everyone, I was not to active on twitter this morning but I have just been under the weather. But must say it was a wonderful morning if you where looking at the euro/dollar on your charts.We had some bad news coming out of the U.S. regarding TIC Net Long – Term Transactions, which rose drastically less than expected. The TIC Long-Term Purchases report measures the difference between domestic securities purchased by foreign investors and foreign securities purchased by domestic investors. With way lower than expected results, the dollar really just got slammed against the euro.

So I want to explain my thought behind my trade this morning, I had to leave the computer area so I did just leave it to breakeven and was not able to make as much as I would’ve if I had been there the whole time.The first screen shot is the 15 minute chart of the EUR/USD:

So here we can see the three moving averages that I have running on this chart, we got the 10 exponential moving average (blue), 20 exponential moving average (red) and the 50 exponential moving average (yellow). Ok before anyone yells at me, I don’t take trades based solely on moving averages, I use them as a form of notifying me to look at something that might develop, “Hey you might want to look at this” warning.

So once I saw the 10 EMA hit the 50 EMA and bounce back across the 20 EMA I wanted to take a closer look at this chart. I had already looked at the news for the day and knew it was coming after the TIC report. So I switch over to the 1 hour chart of the EUR/USD:

So on the 1 hour chart I have my support and resistance lines, I also have my moving averages running on this chart. I do have a different set of moving averages on this chart, the blue line is a 5 exponential moving average and the yellow is a 13 exponential moving average.

The main candle I am looking on this chart has the arrow on it and its the 12 GMT candle, on my broker the 12 GMT is 9am New York time. This compared to the 1215 GMT on the 15 minute chart shows me how the TIC news affected the pair. Now I am looking for more than just moving averages crossing on the chart, we do the two EMA expand on this chart as they get closer to the 1.4330 line I have laid out. Once that S/R line was broken and the EMA`s kept expanding I just knew it would be going long.

I entered there and set a breakeven at the second S/R line at 1.4367, it blew past that so I just set a trailing stop before I left just so I could lock in some pips. I was able to get 91 pips, not a bad day for being sick and gone most of it too. I Hope everyone got some good trades in today and I will see everyone for the London open in a few hours.

Gus