EURUSD 12-19-06

12-19-06

EURUSD

There was no trade recommendation yesterday in the EURUSD. The EURUSD did trade in the 1.3063 to 1.3104 range as expected, and it extended the top of the range to 1.3118 and the bottom of the range to 1.3051. This range looks like it may hold again for today, but the next move at this end of the supply, demand curve is up. The 60 minute moving average has reached the trading range, so a breakout above 1.3107 is possible. That is the picture that is forming on the 180 and 240 charts. I am hesitant to trade any breakouts with the markets being thin and would prefer to buy pullbacks today. Here are the two pullbacks I will trade today. If the EURUSD pulls back to the 1.3072 area, I will go long with a 10 pip stop loss after entry and a first target of 1.3106. The second target is 1.3140. Move the stop loss to even after the first target, and to 1.3094 after the second target. If the EURUSD breaks out above 1.3107 as evidenced by a close of a candle above 1.3107 on the 180 or 240 chart, I will buy a pullback to that 1.3100 breakout area, and I will trade the 1.3100 to 1.3200 trading range going forward. My first target will be 1.3140 and the second target is 1.3170. Move the stop loss to 1.3130 after the first target. The next area of supply at 1.3200 is the third target for now.