I was lucky yesterday, but that is part and parcel of being an FX trader. I bought in at 1.3130 and left a flyer overnight at what proved to be the overnight high. Now I have started buying back in again and I am very bullish on the EUR/USD. I think the market has gotten itself short EUR across the board at the wrong levels. Sovereign buyers were very happy to soak up EUR/USD as it approached and traded around 1.30. I do not think we will see them on the offer until we revisit recent highs above 1.37. EUR/GBP certainly looks heavy but could easily pop back up towards .92; EUR/JPY jumped 500 pips in a day, a sure sign of an oversold, badly-positioned market; EUR/CHF is at relatively low levels considering the fact that the SNB are supporting it.
After tossing all of this into my cranial computer I have turned very bullish. Forget about fundamentals, this is about a market that is wrong and by the time this realisation truly hits home, EUR/USD will be above 1.40 and heading for 1.50 in a hurry. My method of trading is to start building at levels where I feel comfortable with a stop at a level which I can afford (in this case below 1.3120 and 1.3000). I leave take-profit flyers, usually 60-75 pips above where I expect stop-losses to reside (1.3460 in this case) and then start all over again. Once I have started booking profits, it allows me scope to increase my position size and take on a bit more risk.