EURUSD: Pair Succumbs to Long Term Bearish Resistance
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 is trading near 1.3476 around time of publication today.
Over the last three trading days the pair pushed back below 1.3500 which was the target that was noted as likely in the last post about EURUSD in the Ideas You Can Trade series last week.
The crossroads that was also noted in the last post, which referred to the very long term bearish resistance line (red line in middle weekly chart below) which is putting selling pressure on the pair, along with the bullish support line drawn from nearly two years ago -that was just exited to the downside, now confirms that the pair is moving southerly.
Unless support is regained, the bearish momentum could persist, although that bearish resistance line could curtail the speed of the descent, whereas if a breakout to the downside of that line happens EURUSD could get even more bearish - very fast. To the upside 1.3550 and 1.3600 would need to be regained for a bullish reversal, and which could happen easily before resuming into the current bearish trajectory. Two additional weekly charts below depict a longer term perspective on trends that are still persisting.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.3514 with a Limit to take profit @ 1.3551 and a stop-loss @ 1.3479 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” @ 1.3439 with a Limit to take profit @ 1.3404 and a stop-loss @ 1.3469 Risk/Reward Summary: Limit risk = +35 pips profit / (-30) Stop-loss risk = Gain to Loss Ratio = 1.16
Medium Term Daily Candle Chart:
Long Term WEEKLY Candle Chart:
Very Long Term WEEKLY Candle Chart: