Time to short EURUSD

This week’s news:

I have a feeling what happened in Tunisia, and what is happening in Egypt will cast profound and long effects over Middle East. I’m no expert on this matter though. I also have a feeling the Euro zone has not solved the problem. They may have been successful in buying some time.  Again, I’m no expert on this matter either.

It seems to me that EURUSD has topped finally. I most likely short EURUSD in February. I will wait for .2. My target is 1.2440.

Some notes on EURUSD and gold

Some news and columns on Euro and Euro zone this week:

As always, I leave the analysis on those news and columns to professionals, but my general feeling is that Euro zone bought some time before the mid term risk. Nothing really is resolved. I think the big rally against US dollar of the last week is reflecting the situation well.

Here is my current Elliot wave count. A minor tweak from the last post is that now I am proposing that Wave b is not over. Wave b is drawing a expanded flat as A-B-C. So I would never long EURUSD from here. Just wait for the sign of the initial descent to catch Wave C.

I imagine that move from the last December has been confusing many swing traders. They were rather for day trader’s movements and not my market to trade. I’m just waiting patiently for now.

It’s been a while since I mentioned about gold. Wow, it’s been almost a year since my last bullish call on XAUUSD. I made some money by being long of gold in 2010, but I got cautious since it lost the characteristics of impulse wave though the price kept going higher and I was technically missing the opportunity. I’m still on the side of anticipating the mid term correction, and the lost momentum of the gold in the past weeks may be the sign of the beginning of it. I would still hold the temptation of going short of gold. What I’m aiming is the correction that is as big as going below $1200, and possibly to the Wave IV floor support in the chart below. I just need to take advantage of the fraction of the whole movement to make money. So, I just wait.

EURUSD: Targeting below 1.22 in mid term

Happy New Year 2011. The market conditions seem to be changing frequently, and I’m sure 2011 will be very different from 2010. Yet, I’m generally optimistic about the trading outcome just because I’m determined to be a disciplined trader this year, too.

At the end of the last year, I predicted EURUSD to bounce up, and I was right except that the rebound actually was weaker and shorter. My prediction was above 1.36, and I was expecting the dollar to be under pressure longer in Q1. Good thing was I even did not have chance to long EURUSD which would have ended up losing money. Another good thing is that the Elliott Wave count is still valid.

Here is the update of EURUSD 6 hours chart: (Click the image to enlarge)

I believe EURUSD finished b wave, and started the initial descent (1) of c wave, which is also the conclusion of .b. I will patiently wait for 2 wave before placing sell EURUSD order. The blue Fibonacci lines are based on the weak assumption 1 wave is over. Together with the projection of a wave’s travel length (black lines), I would expect EURUSD to descend below 1.22 in the mid term.

Real time trading tweets

The plan in the article may get rejected any time, so please check out my tweets on Twitter.

Current risk exposure:

"","","","","$29,058.30","","","","","","","","","","","","","","","","","","","","41.95%","","","2.00%","","","","","","","","","","","","","","","","","","","","","","","","","","","",""
Rational Move always use stop loss orders, and this is the worse case potential loss over the capital for the currently open positions. This is unrealized loss is less or equal to the risk exposure.

Capital growth

From recent 100 trades (%) The growth right before the 1st trade is set to 0%.
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Drawdowns

From recent 100 trades (%)
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Total returns

Since inception
(Aug 10, 2009)
Year-to-date Quarter-to-date
0% 0% 0%
This is a normalized value: the return on each trade is normalized against the capital just before the trade execution. This way, it is eliminating the effect by the capital change from deposits and withdrawals. The calculation thus reflects the trading performance of each trade. The value does not contain unrealized profits and losses. RM's trading strategy never risks more than 5% of the present capital. Not including subtraction by tax.

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