At the Open. Ready for action on EUR crosses?

09:23CET

Good morning everyone, hope you are fine. I didn't believe much the new record low in EUR/CHF as that has proven to be a very short-lived case, for the unit has bounced around 100 pips to current 1.2850, indicating that perhaps the worst of the selling pressure is gone. I am seeing a lot of volatility/activity in EUR/CHF and EUR/JPY, and they may be the real market movers ahead of Christmas and Year-end trading. I would not dare to short any of the two right now, but in the EUR/CHF case, my position is quite bullish, and any dips you may find I'd suggest to go long with them, with a tight stop below current lows and target above 1.30. Yes, it may not sound like an intraday plan altogether, but I don't think that if the scenario prints out correct and we make pips, you'll care that much about that.

On the majors front, Cable's dip below 1.5650, and as it was expected and noted here, caused a fast sell-off which put all GBP crosses under pressure. The unit is rather steady this morning, trading around 1.5580, but I will not touch it for the time being. And neither will I touch EUR/USD, as price wise it is telling me to go long, but I'm reluctant to buy the currency, especially when the crosses might help the USD (USD/CHF and USD/JPY are good long USD vehicles for now, too). Technically speaking, going long EUR/USD around 1.3225-35, with a stop below 1.3185 may just prove to be OK.

Before finishing this post, let me show you how retail traders are positioning themselves long/short at this hour. See that GBP/USD and EUR/USD have breached parity in favor of longs, so they should feel some more pressure from here on.

Dec 16, 2010 09:40 GMT+0100

   1. USD/CAD
      74.70% 25.30%
   2. USD/CHF
      74.23% 25.77%
   3. XAU/USD
      72.24% 27.76%
   4. USD/JPY
      71.76% 28.24%
   5. GBP/USD
      58.53% 41.47%
   6. EUR/USD
      53.69% 46.31%
   7. AUD/USD
      49.91% 50.09%

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