If you take a look at the daily chart for EUR/USD, you can see the pair has been trading between 1.53 and 1.60 since April.  No trend has really shown itself, as the price has failed to establish a pattern of direction in its highs and lows.  The price has been running up since mid-June, and is now trading very close to all time highs.  We could have a breakout if the price is able to break and hold above the 1.61 level.  Zooming in on a tighter timeframe:

EUR/USD Jul 15 2008

30 - minute EUR/USD

Over the last couple of days the price has moved in an upward trend, pushing to higher highs and holding at higher lows.  Recently a new high of 1.6039 was established, before the price was forced back down below 1.6.  Now, a new low has been established and the price is turning up.

For the breakout, if the price moves into or above the 1.604 - 1.605 range and is not forced back, the EUR/USD could push a distance into uncharted territory.  The heavily psychological 1.6 barrier would be broken, and the breakout trader would love to see the same sort of price action that happened when 1.50 fell.  Of course, the resistance could hold, and push the price back down to the 1.56 levels, or perhaps all the way back down to 1.53.  You have to wait for the pattern to form, else you could get burned.

For the trend, getting in now while the price fights with 1.5920 may be a good idea.  Unloading at around 1.6020, which the price action has seen recently, would yield 100 pips of profit.  Limiting our losses to 50 pips with a stop in the 1.5870 area would be just above recent lows.

Because of these reasons, I'm currenly long the EUR/USD pair, and looking to unload the trend trade around the all time high to seal in some profits.  I plan to get back in if the rocket looks set to blast off with price remaining above 1.6

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