ForexSpirit

The week before Christmas provided some very choppy range-bound trading before the year end holiday.

On the Monday morning during the start of the NY session price moved down to test the support level at 1.3050. A test of this area was my signal to begin reducing my gearing. I therefore closed out my trade that was entered in Q3 on the 8th.

Of course, exiting that trade would signal the lowest price that would be reached for the whole week. Still I’d rather take the loss and have reduced my leverage than have held onto it and had price continue to drop closer to 1.30. The remainder of Monday and early Tuesday trading saw euro recover back up to around 1.3170.

On the strong US PPI and housing data that was released Tuesday I closed out two of my low Q1 entries on the dip caused by the data release. 40 pips was made on one entry, 16 pips on the other.

There were no trade activity on Wednesday as I held my other open positions holding out for a high Q2 exit. Price began to churn around the 1.3170 level.

After the Philly Fed manufacturing index at Thursday at noon I entered a Q1 trade at 1.3177, which exited at my profit target of 1.3207.

Price ended the week looking to retest the 1.31 level after a boost in the US consumer sentiment number, even though Friday morning had also seen the release of generally lackluster PCE, personal spending and income and core durable goods numbers. Only overall durable goods was in positive territory.

I held on to my Q1 trades for too long and with hindsight would obviously have been better off exiting Tuesday night when price was in mid Q2, rather than waiting for a definite return of the median line again.

I now have to hold those trades over the next week as low volume means that the market will more than likely be very volatile and unpredictable. I have limit orders in place if the euro does make a run up, just in case.

I don’t feel that I played the game this week to the best of my ability. The weight of my remaining open trades continues to make me feel constrained, even though the euro made some strong rebounds on positive data and so my one directional outlook remains in place. On the other hand, dollar bulls were also able to appear from the woodwork and make some traction even in the face of continued poor or mediocre US data numbers. It’s a real game of tug of war at the moment. My average open price is at 1.3209 so I’m not that much in the red, but the difficulty that price has remaining above 1.32 has me keeping a close eye on which way we definitively exit this range bound trading in Q1.

Merry Christmas!