EuroDollar Makes New High

The Euro touched a new high against the Dollar today and I’m looking for a pullback so I can go long again.

When I last reviewed the EuroDollar chart on October 5th (EuroDollar Looking Fit To Rally) the price at $1.4618 was recovering from a 350-pip pullback but looking ready to push higher. This morning the price broke above the previous high of $1.4845 and pushed on to $1.4875. But with $1.49 in their sights traders noted the price had strayed way outside the upper Bollinger band and eased off the gas.

The chart is still set up for a move higher with a rising 21-day moving average, an RSI at 62 and the MACD just turned positive. But a pullback after this morning’s excitement is reasonable and I’m looking at two possible entry points.

The first is a more aggressive entry at $1.4775, yesterday’s close, but my preferred entry point would be at the 21-day MAV and that’s around $1.4690. First target is $1.49, then $1.4950. I suspect $1.50 will be a big number, both as a magnet and then as resistance, but if the Euro can clear that hurdle then $1.53 can put out the welcome mat.

A failure to regain today’s highs might spark some talk of a double top which could see a retreat to the $1.45 area, but that’s not the trade I’m looking at yet.

Man Group
It does seem that every time I look at Man Group I conclude that it’s going higher, but that now’s not the time to buy. When I last checked out the chart on 30th September (Man Group Boosted By Lower Redemptions), I reckoned the shares were overbought at 335p, but that I’d be happy buying on a pullback to 313p.

On 5th October the price retreated to 306p, allowing me to get in at 313p as planned. Since then the shares have rallied to 358p this morning, breaking recent highs and looking well on the way to 400p. Today’s candle is currently a spinning top, which is nothing more sinister than a neutral consolidation candle. I’m still running the position, but with my stop loss now up to 330p to get me out if 340p support doesn’t hold.

The chart’s still looking good, but remains overbought with an RSI of 76; the price continues to hug the upper Bollinger band, but is some distance now from the rising 21-day moving average. I’m looking for a small retracement to test support at 340p; if that level holds I might add to my long position. If it doesn’t, I reckon I’ll be taken out on the way down to the 21-day moving average at 318p.

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