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Forex: Ideas You Can Trade - EURUSD Reverses Retreat, Back Above 1.38

Posted by Steven Hatzakis on Mar 6, 2014 11:29:00 PM

EURUSD: Pullback Reversed After Bullish Momentum Pushed Over 1.38 on Wednesday

The medium term daily candle chart shows the Euro currency (EUR) versus the United States Dollar (USD), this pair is known as the EURUSD. Today the pair is trading near 1.3859, after surging during wednesday's trading session which just came to a close in NY as it's 1:19 am EST around time of publication.

Last time the EURUSD was covered in the Ideas You Can Trade series, a pullback was lurking after support on the prior 100% fibonacci line was breached, however that bearish momentum was reveresed and as the pair traded higher breaking above the 1.3800 level it is close on approach to reaching prior highs of last month near 1.3890 where resistance had existed. 

Its possible that if that line is met again it could provide resistance for a further time, although if the pair can break about it, then 1.3900 and subsequently 1.4000 could be a very close target in terms of proximity. 

From a longer term perspective, the triangle formation that can be seen now has a clear upside breakout, although if this is a breakout volatility could following pushing the pair either equally higher or reversing it to the same degree. 

Below are examples of how to trade a bullish continuation or a bullish reversal:

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.3897 with a Limit to take profit @ 1.3917 and a stop-loss @ 1.3879 Risk/Reward Summary: Limit risk = +20 pips profit / (-18) Stop-loss risk = Gain to Loss ratio =  1.11

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.3811 with a Limit to take profit @ 1.3788 and a stop-loss @ 1.3834 Risk/Reward Summary:   Limit risk = +23 pips profit / (-23) Stop-loss risk = Gain to Loss Ratio =  1.00

 

Medium Term Daily Candle Chart:

eurusd march 6 2014 notedaily

 

Long Term Weekly Candle Chart:

eurusdweekly march 6 2014 note

 

 

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