EURUSD: Higher-High Looks Probable as Short Term Bullish Momentum is Building
The medium term daily candle chart below shows the history of the Euro currency (EUR) versus the United States Dollar (USD), known as EURUSD, and trading near 1.3939 around time of publication today.
In recent weeks bullish momentum appeared to be building as long term trend lines converged, although the march 13th high of 1.3965 fell short of the 1.4000 mark - followed by a pullback shortly thereafter and as discussed in the last post about EURUSD in the Ideas You Can Trade series.
Now that the EURUSD is back near that high, 1.4000 appears as an imminent level that will test the pairs direction, with either resistance causing a reversal downwards, or a breakthrough to the upside causing a bullish continuation.
Below are examples of how to trade a bullish continuation or a bearish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.4009 with a Limit to take profit @ 1.4049 and a stop-loss @ 1.3979 Risk/Reward Summary: Limit risk = +40 pips profit / (-30) Stop-loss risk = Gain to Loss ratio = 1.33
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.3859 with a Limit to take profit @ 1.3821 and a stop-loss @ 1.3891 Risk/Reward Summary: Limit risk = +38 pips profit / (-32 ) Stop-loss risk = Gain to Loss Ratio = 1.18
Medium Term Daily Candle Chart zoomed:
Medium Term Daily Candle Chart: