Euro Cross Pick 05.25.2011
Keeping up with the long EUR/CAD trade from earlier this week, the entry at 1.3762 got triggered as the pair advanced to 1.3810 on Tuesday, and the pair appears to be trading with a triangle, which suggests that we will see a continuation of the rebound from earlier this year. As the technical developments continues to reinforce a bullish outlook for the euro-loonie, I will maintain a soft target at the 4/28 high (1.4102), with the stop at 1.3641, the 200-Day SMA.
At the same time, I am also keeping a close eye on the NZD/USD as it appears to be range bound between 0.7730-0.8000, and favor shorting the pair close to the upper bounds as there appears to be a major shift in risk-taking behavior. However, as we are likely to see market participation taper off ahead of the holiday weekend, I am looking to sit on the sidelines as we head into Thursday, but will look for an opportunity to play the range in the week ahead as market liquidity returns.
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