Trade Plan (Dec 21 '09)

I'm back from hibernation after more than a month of not trading. This silence on trading was mainly due to the forex market entering a technical sideways trend --- caused by the strength of the USD and a few weeks back, the spectre of us going back into the abyss with the Dubai World near-default.

Well, after reviewing the charts, I believe there are two (2) pairs worth taking a look at: the EUR/CHF and the EUR/USD.

EUR/CHF (Euro-Swiss Franc)

This pair breached the 1.5000 mark last week. The last three times in the past twelve months that this pair blew below that line, the SNB came into the market with guns blazing, selling the Franc and sending the pair blasting to the air 200-600 pips. Well, it might just happen again. So, I'm keeping a close eye on this pair with a couple of "ambush" positions slightly above 1.5000.


EUR/CHF Daily Chart as of Friday Dec 18, 2009


EUR/USD

The USD has been on a stampede the last two weeks. This strength sent the EUR/USD pair to a 3-month low. RSI indicates that the pair is alreday oversold as well the Bollinger Bands. So, I am waiting for a setup on this pair to form and go LONG.


EUR/USD Daily Chart as of Friday Dec 18, 2009