WorldWideMarkets Community

Forex Trading, Market News & Technical Analysis

Today’s Trading Edge: EUR/USD – Despite Taper, Modest Moves May Continue as Thin Markets Approach

Posted by Edward Moya on Dec 23, 2013 8:55:00 AM

describe the image

EUR/USD has further tightened the narrowing consolidation that has been in place after the initial knee jerk reaction to the December 18th Fed tapering decision.  End of the year portfolio flows and investing in Europe has so far prevented the strong corrective move in the euro.  With the holidays upon us, trade flows are expected to be choppy and stop runs could trigger a move higher with the high-beta currencies before we finally see the follow through with strong demand for U.S. dollars. 

Price action on the 60-minute chart displays a significant decrease in volatility with price slowly stabilizing and attempting to recapture the 1.3700 handle.  Most recently, euro dollar has tentatively respected the key support line that started on November 7th.  With price still showing some signs of bullish life, we will look to fade one last rally before targeting a major corrective move.  With end of year flows a tight stop loss is required, because we still may see the banks drive a short squeeze as liquidity lightens up. 

A bearish Gartley pattern is potentially forming around the 1.3740 level.  Initial downside targets include the 50-day SMA at 1.3612, with our downward objective at 1.3280.    

The trade: Sell EUR/USD at 1.3740, with a stop loss at 1.3780 and a take profit at 1.3620.  The Risk/Reward Ratio is 1:3.

Edward J. Moya

Technical Strategist

WorldWideMarkets Online Trading

 

Tools & Educational Resources

Forex 101LEARN MORE >>
Learn the basics of Forex and how to practice trading the markets.

GlossaryLEARN MORE >>
Confused by the language? Click here and search for key trading terms.

FAQ CenterLEARN MORE >>
Browse our frequently asked questions and find your answers right away.

VideosLEARN MORE >>
Access to the educational lessons, webinars and platform walkthroughs.

READY TO TRY THE MARKETS?

Get started with a FREE $10,000 Demo Account and experience the Forex Market RISK FREE!