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
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