Setups like this don’t come every day…
Dave Floyd is a professional FX and stock trader based in Bend, OR and the
President of Aspen Trading Group. Dave’s approach to FX combines technical
and fundamental analysis that results in trades that fall into the swing
trading time frame of several hours to several days. For a free trial to
Dave Floyd’s Daily Forex Alerts
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Today I wanted to change the focus a bit and look at an idea that has some
relevance on a longer-term time frame, the basis of the trades is first based on
macro analysis, while ultimately the entry point will be determined by
technicals.
The nice thing about longer-term trades is that they can provide a solid
boost to ones performance while allowing you to continue to take a short-term
view for ‘nickels and dimes’ and go for ‘dollars’ with the position trades.Â
Given the trending nature of FX markets, ignoring longer-term set-ups is done to
ones detriment. On average we may take one of these longer-term tradesÂ
every month or two, but when the analysis is spot on, the gains average well
over 125 pips versus the standard gain on a swing trade that might be 50-75
pips. Our recent short trade in NZD/CAD netted just over 200 pips.
Short EUR/GBP:
-Â Rates in the UK are likely to stabilize or perhaps drift higher,
either way, the rate picture in the UK is far more favorable than in the
Euro-zone
-Â Inflation in the UK is above the Central Bank’s ‘target’ rate
-Â The UK housing market has stabilized as noted by the recent up-tick
in mortgage approvals
While the above bullet points are not reason enough to short EUR/GBP, when
dovetailed in with the current technical back-drop, it becomes clear that there
is a solid trade in the making here.
Our weekly directional indicator is also confirming this potential short
set-up and if triggered would indicate the beginning of a long-term downtrend.
As always, feel free to send me your comments and question.
Dave Floyd is a professional FX and stock trader based in
Bend, OR and the President of Aspen Trading Group. Dave’s approach to FX
combines technical and fundamental analysis that results in trades that fall
into the swing trading time frame of several hours to several days.