Back from vacation and two possible trades

Posted on 29. Jun, 2009 by Jakob in Random Noise

I just got back last night from one week in the south of Spain. Great wine, lots of seafood, cold beers, etc. This was really what I needed after all the school stress. Now I am back and ready for some action.

Take a look at the chart below. Press the link and the picture should pop up. This is the daily chart of the GBP/JPY chart. The pair is clearly in an up-trend but the last few days it has been retracing a bit, and is currently ranging. The pair is currently trading at 157.085 and I have marked a upper and a lower level respectively at 158.836 and 155.706. A break and close above or below any of these two levels would give a good entry point in my opinion. I would look for a close just above or below, or if there is a strong break, I would wait for retracement back to the marked level and then enter in the direction of the break. Although a break to the downside is a possibility, I am currently favoring an upside break, and believe this should happen within a short period. If you do enter on a break and close of the daily chart, I recommend you to have a good sized stop loss and take profit.

Next setup. Click the picture below to see the chart. This is the daily chart of the EUR/CAD. It is in a down trend but lately it has been retracing, and is currently trading at 1.6213. If you take a look at the chart, you will see that we are close to the trend line. My guess is that the pair will follow the trend down for a short period (keep in mind we have NFP coming up this Thursday!), and this trend line should act as resistance. If the pair reaches the trend line or comes close to I will most likely enter on a short trade. This all depends on the speed with which is reaches the level of the trend line. If you want to avoid the possibility of fake outs, be sure to have a wide stop loss. I am going to play it tight, so any small break of the trend line with 30 pips or so will be my stop loss. Let’s see how things play out.

Related posts:

1. Daily Lesson # 4
2. GBP/JPY Trend line break – Further Downside?
3. Daily Lesson # 2
4. Forex Signal # 1 – Trade Setup EUR/USD
5. Cable – The Week Ahead

Tags: holiday, trade setup