News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bullish
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • morning star in $ES from Thurs-Monday. So far little follow through as yday was pullback, but can keep focus on the bid. NFP on Friday, FOMC in 2 weeks. Some space in between for animal spirits to run $SPX $SPY https://t.co/aJwzVuLZsd
  • ECB's Weidmann says size of yield moves not particularly worrisome, adds that the ECB are looking at conditions beyond government bond yields $EUR
  • $USDCAD Daily put in a support hold around the 2622 level, keeps door open for topside esp for $USD strength directives, falling wedge still in place https://t.co/HqtrIaxplZ
  • $GBPUSD Cable res showed up around the 1.4000 handle looked at yday, but buyers have so far stepped up to support ~3950, keeping door open for another run at a break back-above the psych level https://t.co/hiUkEbzlUA https://t.co/GmcUHYcnWM
  • $EURGBP hovering around session lows - Reminder, sizeable option expiry at 0.86 (1.9bln) rolling off today
  • Europe sale of new bonds exceeds EU400 BLN in record time. $EUR #ECB
  • 🇨🇦 Building Permits MoM (JAN) Actual: 8.2% Expected: 3.5% Previous: -4.4% https://www.dailyfx.com/economic-calendar#2021-03-03
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 92.18%, while traders in Germany 30 are at opposite extremes with 75.30%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/7buglwKGvK
  • #Bitcoin is stronger today, now trading at its highest levels in a week. The cryptocurrency rose from a morning low around 48,000 to currently trade around 52,000. $BTC https://t.co/Jrb1x1WFXo
  • 🇺🇸 ADP Employment Change (FEB) Actual: 117K Expected: 177K Previous: 174K https://www.dailyfx.com/economic-calendar#2021-03-03
If Euro is Weak… and the Dollar is Weak... Where should I go?

If Euro is Weak… and the Dollar is Weak... Where should I go?

James B. Stanley,

If Euro is Weak… and the Dollar is Weak….. Where should I go?

As the Euro continues to trade higher against the Greenback, many traders are left scratching their heads as to why we are seeing these gains.

Some traders would point to the recently passed Greek Austerity plan. Traders on the other side, looking for Euro weakness, might bring to mind the rising Spanish and Irish bond spreads. The bond spreads of these two nations is of extreme importance now, as these yields can help show us how much risk the market perceives to be involved in each of these economies.

Quite simply, the higher the rate – the ‘riskier,’ the market is considering these economies to be; and the higher the propensity of a potential default.

However – the recent ‘strong vigilance,’ comment from ECB Head Jean-Claude Trichet regarding inflation leads many traders to believe that the Euro Zone will enact a rate hike at their next meeting, scheduled for next Thursday (July 7th). This could very well explain the strength seen in Euro this week, with potential strength leading up to the announcement.

However, the potential issues in Europe are very real. And in the United States matters don’t necessarily look much better as both sides of the political arena spar over the US Debt Ceiling – the whole time the head of the Treasury (Timothy Geithner) is reported to be considering stepping down from his post.

Needless to say – If I’m looking to short the Euro, I may want to look at another currency that could potentially be stronger than US Dollars.

One currency that has been quite strong that may potentially fit the bill is the Japanese Yen. Yen has shown considerable strength after the coordinated G-7 intervention (on the heels of the Tsunami, and Fukushima).

Additionally, EUR/JPY happens to show what could, potentially be, a nice setup for a short position:

If_the_Euro_is_weak_and_the_Dollar_is_weak_body_Picture_1.png, If Euro is Weak… and the Dollar is Weak... Where should I go?

Created with Marketscope/Trading Station 2

EUR/JPY has faced considerable resistance at the 117 level over the past 3 days. Notice the wick of the past 2 daily candles intersecting with this key level.

Current bullishness has pushed price right up to this 117 level – and if EUR/JPY fails to break through – I’m going to look for a potential short position. I’d like to enter a short position if momentum is strong enough to breach 116.50 – with my risk shortly above the top of the wicks of this grouping of candles. I’m looking for slightly more than 2 times my initial risk level (160 pips).

Below, you can see the entire trade outlined on the FXCM Trading Station Application – utilizing the Trading from Charts feature in which traders can place, and manage their trades without ever leaving the Charting package.

If_the_Euro_is_weak_and_the_Dollar_is_weak_body_Picture_3.png, If Euro is Weak… and the Dollar is Weak... Where should I go?

Created with Marketscope/Trading Station 2

If you would like to read more about the Fundamental situations taking place in the Europe, as well as the United States, DailyFX Analyst David Song put together a phenomenal article on the topic (link available below):

U.S. Dollar Consolidation Ahead, Euro Rally Hinges on ECB

If you would like to learn the strategy I used to place this trade, or any of the strategies we teach in the DailyFX+ Trading Course – you are more than welcome to view our On-Demand Video Course. In the 15 modules (each with 4 videos), we offer 10 unique strategies for approaching the market. The DailyFX+ Trading Course is available to all LIVE FXCM customers. You can click on the link below for access:

DailyFX+ Trading Course

On top of the DailyFX+ Trading Course, we host live webinars 3-4 times per trading day in which we chart and diagram our trades, and student-traders can ask us questions in real-time about strategies, setups, or current market conditions. You can navigate directly to the DailyFX+ Trading Room from the link below:

DailyFX+ Trading Room

If you don’t yet have a live account with FXCM, you are certainly welcome to request trial access to the DailyFX+ Client Suite that is available to every live FXCM Client. You can request trial access from the following link below (sign-up field located to bottom right corner of page):

DailyFX+ Trial Access

To join James Stanley’s distribution list, please click here.

Thank you very much for your time, and Happy Trading!

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES