Convinced that the strength of the USD relative to the EUR will continue to exert itself, I shorted the EUR, entering into a position of 20,000 around the 1.2700 mark, placing my stop at 300 pips (a wide stop in the case that I'm intially wrong, and the EUR gets stronger before getting weaker).
I don't have enough experience to know how the weekend gap will likely affect my position, so I have a little hesitancy carrying this trade into the coming week. Nonetheless, the day ended positive 18 pips, and I'll keep a close watch when the market gets moving again on Sunday afternoon.
The weekend gap did in fact move against my position. In the future I'll have to be a bit more careful carrying trades that I'm not committed to holding long term. On this trade, the EUR/USD opened 26 pips against my position, essentially wiping out any gains I would have had if I had closed the trade at the end of the day on Friday.
On the other hand, there has been a lot of talk in the worldwide financial markets that the upcoming US presidential elections could have a sizable impact on the USD, with the consensus being that an Obama election would strengthen the USD, as it would signal an end to the fiscal policies of the last eight years. Some analysts have said that the EUR/USD could see lower than 1.2000. From where the market is at this minute, that's nearly 800 pips. Hoping that's the case, I plan to hold into my position until after the election is over.
The EUR has shown alot of strength against the USD in the last couple of hours. Being that I believe the US elections will strengthen the dollar, I have increased my position from last friday, Oct 31. I'm now shorting the EUR/USD with 70,000, with the opportunity to be in the black at 1.2780. I am now leveraged out quite a bit for one trade - which is something I've been joking about in person, but probably not a wise move in practice.
The EUR/USD has been up for essentially the entire session in the Asia market, and so far has blown through the top of several resistance levels. It looks like there was not enough willpower on the part the buyers to push the EUR/USD beyond 1.2860, so the the EUR/USD is now currently dropping to test resistance levels previously gained earlier in the session. If the EUR/USD does test above 1.2860 - and then subsequently pushes beyond 1.2900, it'll likely continue to push upward to 1.3000 before reversing.
It's my hope that resistance persists and the buyers are weak, and that the USD can show it's strength in the upcoming session in London. I'd really rather the EUR/USD not break through the resistance levels currently being tested. The higher the EUR/USD climbs in today's and tomorrow's session, the more my position will be out of the black once the US election day is in full swing. Being that I plan short the EUR/USD through the election and shortly thereafter, I may end up purchasing more lots to cost-average out my position. Which is basically an amateur move.
While my initial prediction was correct about going long on USD through the US election, the effects lasted for only 90 minutes or so.