Sorry, you need to enable JavaScript to visit this website.

EUR/USD Trading Strategy for the week 17-21 Feb 2014

You are here

EUR/USD Chart 17 Feb 2014
4/5 of 5 ratings

Of to a slow start of the week, the Euro is likely to rise further

Our strategy session for this week is aimed to deal with the ongoing US dollar weakness at least until Wednesday. The main risk to this trade is some sort of hawkish minutes from the January Federal Reserve meeting that will be released on Wednesday.

Euro strength likely to continue on the basis on decent recovery and less downside risks to price stability in the EU. The first data points that could support this view are released on Tuesday, this is our first call - buy daily calls around 1.3690 for Tuesday expires.

If we take a look at the chart we see a relentless rise of the single European currency against its US counterpart. There are some risks to this outlook, but for now they seem unlikely to materialize at least until Wednesday as we already stated above.

The first support comes from previous resistance around 1.3690 that has been broken on Friday, however the EUR/USD binary options forex pair has not been able to break much further during the day.

This morning we saw the pair mark daily highs around 1.3724, however that has not been sustained for now and current price levels are hovering around 1.37. In order to gain further momentum the move will have to garner some speed and break above 1.3730.

If we see that happening on a sustained hourly basis we could even purchase some hourly call options. For now we don't expect much moves today as the US market is closed and liquidity in Europe seems subdued. The main theme for tomorrow is to manage a close above 1.37.

So for now we are waiting for a revisit of the 1.3680-90 levels to provide us with an opportunity to buy daily calls expiring after tomorrow's close. We are not fans of thin traded markets, so today's expiry is not attractive to place trades.

Stay tuned for updates in the comments section below!

Comments

Matt T.'s picture

We are observing another phase of consolidation in binary options on the EUR/USD pair. Following yesterday's failed attempt to the downside the pair has consolidated around current levels around 1.3710. It is going to be a tough call to issue a trade recommendation today. We need to see a break of recent ranges to confirm the next move for the EUR/USD binary options forex pair. Look at a break above 1.3725-30 as a key to unlock the upside and buy hourly calls on a break and close above the line close to those levels on our chart. If we see a move to the downside and a break below 1.3685 we could get an opportunity to buy daily puts. Enjoy your weekend, and stay tuned for more strategic sessions.EUR/USD Chart 21/02/2014

Matt T.
Matt T.'s picture

We are experiencing a leg lower in the EUR/USD binary options forex pair. The manufacturing data this morning form the Euro Zone has put strong pressure on the downside as the rate dropped all the way down to 1.3685. The afternoon has seen the pair rebound somewhat as the inflation rate in the US did not provide a big case for buying dollars. The Euro recovered to above 1.37 to test previous support now resistance in the 1.3725 area. We are buying puts around 1.3715 as of writing for the end of today's expiry.EUR/USD Chart 20/02/2014

Matt T.
Matt T.'s picture

We are still looking for a drop to 1.3725-30 area to buy daily calls. We just saw the release of the federal Reserve's minutes and not much new impetus has been provided the pair dipped towards 1.3434 lets see if it can dip as low as our support line to give us a reason to buy those daily calls. Tomorrow is crucial in terms of US inflation data. The downside will be open if we break and close on an hourly basis below 1.37 - that will trigger our reversal strategy with a double bet on puts.Image

Matt T.
Matt T.'s picture

Well what can we say - we told you so! The pair has been moving slowly but steadily upwards all day long and the main reason behind the move is weaker than expected US data. Looking at the chart we would continue to be buying Wednesday calls if prices drop towards 1.3730, however if prices manage to drop to below 1.37 we are likely to bail and reverse the trade by buying puts for Wednesday's expiry. Stay tuned to our strategy session as more comments will be posted to help you out throughout the week.EUR/USD Chart 18/02/2014

Matt T.

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.

You may also read