After three days we decided to close our position on the EURUSD as our trade did not play out. In the end we were almost flat so we did not lose money.
However we keep our bullish view on the USD and we decided to change the pair and to go long the USDKRW (USD versus South Korean Won). We believe that the Won may depreciate against the USD mainly because of the rate cut implemented by the Korean central bank. Moreover, we think that the South Korean central bank will further try to weaken the Won in order to keep competitive the Korean exporters that are losing ground against their Japanese counterparties.
In addition, the huge change in the level of implied volatility of the options of the pair suggests that there is room for a quite a large price movement. We set the stop loss at 1086.50, profit target 1121 and the trailing stop for one day at 1.20%.