Over the past few days I’ve mentioned the resilience of the price channel between 1.3955 and 1.3977. Now, 4days later and nothing has changed. This LEDGE has consistently provided a breakout station for almost 3 weeks and today’s EUR Trak breakdown (defined in yesterday’s post) and shown as the orange linear regression channel illustrates the point perfectly.
The Ledge has been a reliable launching pad for short term long/short traders although the drawdown and whipsaws along the way have been dramatic. Those with less tolerance for such volatility may consider just trading FXE, which is only active during the US market hours and which displays the same Ledge (deduct .50 from EUR prices to derive FXE prices) with fewer of the Prozac inducing moments. Looking forward a bit the Ledge may be under pressure to crumble. If so, we may see a pullback to 133 on the EUR and, if past experience is any gauge, it will probably happen in a relatively short time frame.
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