EURUSD: Will the Support Target Reached on 1.2750 Hold?
The medium term daily candle chart below shows the price history of the Euro currency (EUR) versus the United States Dollar (USD), known as EURUSD, and trading near 1.2755 around time of publication today, after rebounding from session lows of 1.2748 minutes earlier.
Last time this pair was reviewed in the Ideas You Can Trade series earlier this month, volatility had returned and a steep dive had already begun with the pair caught in a downtrend.
The support line that had been drawn on 1.2753 (in the last post) has been reached today, as the downtrend continued, and coincides with the low reached in July when the pair had then-rebounded sharply.
If this low could prove to hold then such a recovery could follow, whereas if support around 1.2750 fails then a bearish continuation should unfold further, with the April low of 1.2745 also likely to fail if support around current levels cannot be maintained.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.2802 with a Limit to take profit @ 1.2825 and a stop-loss @ 1.2782 Risk/Reward Summary: Limit risk = +23 pips profit / (-20) Stop-loss risk = Gain to Loss ratio = 1.15
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.2739 with a Limit to take profit @ 1.2708 and a stop-loss @ 1.2760 Risk/Reward Summary: Limit risk = +31 pips profit / (-21) Stop-loss risk = Gain to Loss Ratio = 1.47
Medium Term Daily Candle Chart:
Weekly Candle Chart: