How to Play the Euro Against the Pound (w/ Joe Perry) | Stock Trade Ideas

How to Play the Euro Against the Pound (w/ Joe Perry) | Stock Trade Ideas


Welcome to trade ideas. I’m Jake Merle sitting down with Joe Perry of Forex analytics Joe great to have you back on the show Thanks. I was great to be here Jay So you were last here about a month ago going along the Euro against the dollar it looked like it was breaking out around 113 or so, but then it quickly reversed and you got stopped out within a week right after interview I know that was just a short-term trade. That didn’t work out However, I believe for today you have another trade on the euro except this time you’re going short Can you walk us through exactly what you’re looking at? Sure well going back to that last trade that was mainly a dollar index trade that I was looking at to move lower and because 63% of the dollar index is made up of the euro. I was trying to play the Euro long To take advantage of that move. I was looking for a Lower and the dollar index so you’re right. It did move lower quickly We got stopped out then it did go up actually the 114 right from there, but it didn’t go to the target I was looking for 115 50 which tells me that it’s weak overall because it didn’t even reach up to that 11550 level which is kind of in the middle of that 118 112 level that we had been in for a really long time So today I’m looking to go short the euro and so actually just to back up a bit You’ve actually been a dollar bull bearish on the euro for the better part of the past six to nine months You’ve actually first been on real vision last fall and it was actually just last interview a month ago where you put on a short Term counter trend trade and now it looks like you’re going back to your original Thesis where you’re bearish on the euro, and now it looks like you’re looking to play it against the British Pound. Is that right? so the reason I’m not playing with dollar today is because Powell speaking on Wednesday and Because the payrolls were strong out of the US the other today you could go either way or you could stay neutral so I kind Of want to stay away from the dollar at least for the next couple days I’m not going near that but when you look at the Euro against the pound There are a number of things going on there the data actually out of the UK has been Okay, it hasn’t been great. It hasn’t been bad, but it’s been pretty stable You have the obviously the ongoing brigs it negotiate and now they’re looking for a new PM However, this trade is actually that I’m looking at now is only a month long trade So unless something comes out where breaks it doesn’t happen Within the next month then I think this trigger aid to go short yura startling is going to work out So what are some of the specific tactical is you’re looking at right now? Well originally back in 2015 we put in a double bottom in euro sterling and we had a one two three four five wave move higher and since then in 2017 we started trading sideways Kind of almost flagging but it’s been a very long two year flag low was put in 2019 at 85 43 and Now it’s trading up and we’re back in here the top end of that trend line on our weekly We’re putting in a pin bar Which which is showing there’s not much movement there as we’re sitting at the top of that trend line So as we’re sitting there and you zoom in now onto the daily you could see that we came off that low in May of 85 13 traded higher to up where we are now, which I was just saying that trend line that goes all the way back to 2017 Also, we’re putting in an ascending triangle right here near the top and I love trading ascending triangles The target of an ascending triangle is to retrace the whole descending triangle the target for that is 8850 However, I think it’s gonna go lower. I’m looking 8750 which is actually 50% of the range We’ve been trading and for that whole time also within that ascending triangle There’s what’s called a three driver pattern and that’s when price puts in three new highs but the RSI puts in three lower highs and there’s a high probability that price will roll over when you see that and down at that 8750 levels also 200-day moving average. So 50 percent retracement of the Range we’ve been in and the 20-day moving average coming around that level Seems like it could be a good spot for it to target So you mentioned the ascending triangle and also the three driver are there any other technicals you’re watching? That’s confirming if thisis well, if you look at from a harmonics perspective, you can see that We are trading back up towards The 88 percent retracement level from the highs of 2019 at that eighty percent retracement level we’re looking to turn lower there and as that happens, that’ll be a bearish bat pattern and again, fifty percent is one of the targets of a bearish bat pattern so that would come in right around that same level also from An only wave perspective where at the end of a bigger wave three reversal pattern, which is labeled lis Like D of a bigger triangle pattern and as that rolls over It’s also targeting down like eighty seven thirty or so so if That’s right around that general area being 750 that we’re looking for and so what key levels would you be looking at to make the trade so I’ll be looking to give in at the market which Today is right around 89 7b. I’m gonna tight stop on it though up around 90 22 However, if it does break through there, I’d be looking to get short again up around 91 Which is the highs from earlier in the year target on a downside is? 750 as I’ve been saying and I think that if it does happen, it’s gonna happen quickly Probably within a month or so and what would you say is the biggest risk to your trade? The biggest risk is that? The ECB comes out and begins, you know with this less dovish speak Than they have been the data may come out a little better over the course of the next month Which may push here a little bit higher? something may Happen over the next month and breakfast is done and over with and everything’s great so that that would be some of the things and So we do have an important Fed meeting coming up at the end of July and I know this play isn’t on the dollar Specifically, but how do you think the Fed meeting could impact your thesis one of the reasons? I’m trying to stay away from the dollar here is because of Powell speaking the Fed coming up however, you know I think a lot more is going to depend on what happens on Wednesday from what he says and then the data releases in between there because they have said that they are data dependent so Getting that far out for me is uh, it’s a little too far for me to start thinking about the dollar again All right, Joe. We’ll see how it plays out in the weeks and months to come. Thanks so much for joining us. Thanks Appreciate it. So Joe is bearish on the euro Specifically, he likes shorting the Euro against the British Pound at current levels with the stop-loss at ninety 22 and a target price of 87 50 over the next month now is Joe Perry a Forex analytics. And for real vision, I’m Jake Merl You You

One Comments

  • Tudor Conciu

    July 10, 2019

    I understand his reasoning and I am not saying that he is wrong.

    I see it as: Well the FED is cutting rates according to today's Powell speech/testimony even friday's NFP numbers. And that is going to drive the $ index lower(like it did today) BUT at the same time point the EUR to the upside.
    Yes I know the EU is not in a good place from a economical standpoint but that doesn't mean that the EURO won't strengthen and most likely it will just because of USD weakness.

    And the GBP the market is only interested in Brexit news. It doesn't matter about economical releases. Even BOE said that they first need to wait and see how Brexit unfolds and they will act accordingly.

    I am not saying to buy the EUR……. LOL at least I wouldn't because the EUR it's just a mess !

    Reply

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