WorldWideMarkets Community

Forex Trading, Market News & Technical Analysis

Forex: Ideas You Can Trade – EURUSD Attempting To Stage A Recovery

Posted by Steven Hatzakis on Jun 27, 2014 1:01:00 AM

EURUSD: Nearing Medium Term Resistance after Bounce on Long Term Support line

 

The medium term daily candle chart below shows the price history of the Euro currency (EUR) versus the United States Dollar (USD). This currency pair is known as EURUSD, and trading near 1.3625 around time of publication today.

Support has been building gradually since a bounce around the long term bullish trend line occurred earlier in June when the EURUSD was last reviewed in this series, and when it was anticipated to trade lower. While it did indeed trade lower – only briefly – since that last post, the bounce that happened just above 1.3500 has enabled the pair to slowly return to current prices were it now looks poised to test a medium term  bearish resistance line (upper yellow line on chart below).

If this resistance line can be overcome, the steady ascent may follow and could even pick up speed as the pair has seen its volatility stagnate to a lesser degree in recent weeks, trading in just over a hundred pip range. If resistance holds however, then 1.35 could be revisited soon, and is where considerable levels of support still exist as discussed in the last post. 

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

1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.3674 with a Limit to take profit @ 1.3711 and a stop-loss @ 1.3639 Risk/Reward Summary: Limit risk = +37 pips profit / (-35) Stop-loss risk = Gain to Loss ratio = 1.05

2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.3545 with a Limit to take profit @ 1.3501 and a stop-loss @ 1.3581 Risk/Reward Summary: Limit risk = +44 pips profit / (-36) Stop-loss risk = Gain to Loss Ratio = 1.25

Medium Term Daily Candle Chart:

eurusddaily june 27 2014 note

 

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!