Good morning traders.
As I’ve mentioned a few times in the past couple of weeks I am taking some time off this summer to take a holiday and also to figure out the best way forward from here. Consequently, I´ll not be posting much in the next 2 months and not at all in first two weeks of July.
As a quick recap I started this morning briefing to provide trade ideas and decent levels for both part time traders and daily chart slaves like me who are at the screens full time. We have focussed on the eurusd as it´s the market I have concentrated on for the past few years and, as one of the most liquid, to get a good mix of volatility and decent price action.
To start with we were getting good levels to trade from and our performance was excellent. However, recently things have changed with volatility tailing off to near minimums and price action for short term day trading missing in action presumed dead :). Things will get better but while the instrument is trading as it is, it is difficult for me to set any decent levels for model ´set and forget´ trades and short term price action is incredibly tricky to read.
So I will take a look at how we move forward. We may need to adjust our strategy, change our instrument and or change the way I deliver information or any combination thereof. If I can come up with a better solution than the way we trade it at the moment and which gives a decent chance of high odds returns I´ll be sure to get back in the chair and write up some daily briefing notes.
On the subject of performance noted below are the data for the six months to June. We have not had a bad run at all for model trades and if you were using the scalp levels you can see that the returns from the ´max´strategy were even better.
However, while the max. strategy performed better (by definition in reality) the fact that we were able to deliver over 500 pips in 6 months using a pretty straightforward set and forget technique is an achievement I am delighted with. Setting daily levels like this is a tough gig as I´m sure many of you know so if you´ve been following my trading style, keep it up. While its a bit harder at the moment its still a viable method!
This weeks outlook
For this week the key is whether the Fed gives any further indications that it intends to enact any rate cuts and whether the ECB is thinking of taking action this month to prop up EZ inflation. With Trump and Xi signalling in Osaka this weekend that they would like to kiss and make up or at least éxtend and pretend´ to stave off a looming trade / cold war it seems an insurance cut by the Fed is slightly less warranted.
On the other hand Trump has made is position and enmity to Powells Fed position pretty clear this past couple of weeks and whether Powell and his compadres can hold firm much longer remains to be seen.
From a technical standpoint the eurusd is having a tough time breaking the 1.14 level and we have put in 3 daily indecisive dojis in succession to end the week. This suggests a dip lower is on the cards to kick off the week especially as the Fed is less on the hook to announce any changes to their stance post the US china ´truce´. Watch out though for any pertinent comments from the Fed or the ECB in the run up to the ECB meeting on the 25th of July. 1.1550 still looks like a decent top target should we get any push up in prices.
See below for charts and levels.
Thats a wrap for now dear reader. I wish you all a relaxing and profitable summer and look forward to talking again in the near future. Thanks to all of you who have commented on these posts and I hope they have been of value and interest.
The Daily Chart
Prior to the Sunday open all I can say is we are are range bound with a slight downside bias.
Levels as per.
Be on the look out for a test of the 1.13 level as a first test should yield a bounce. If we don’t get very far back up the chart a push lower and a retest on the level from the underside would be a good opportunity to try a short as support becomes resistance.
Have a good one amigos.
See you in a few weeks:).