WorldWideMarkets Community

Forex Trading, Market News & Technical Analysis

Today’s Trading Edge: EUR/USD- Falls to a 2-year low on expectations for additional stimulus

Posted by Edward Moya on Nov 6, 2014 12:53:00 PM


The European Central Bank (ECB) was unanimous in seeing the need for more stimulus and ECB President Mario Draghi announced that the Bank is prepared to act.  No announcements were made of new measures, but the expectation for additional stimulus drove the euro to a fresh 2-year low to the dollar.

Price action on the 240-minute EUR/USD chart displays the 130 pip drop that occurred during the ECB press conference.  Bearish momentum is firmly in place as price snapped a six day rally and is trading comfortably below the 200-, 100-, and 50-day Simple Moving Averages.  The key bounce that occurred off the 1.2500 handle in early October provides us with our initial downside target using the 161.8% Fibonacci expansion level at 1.2256.  Major support will come from the psychological 1.20 level. 

With the market heavily short the euro, a move towards 1.2500 might squeeze out some late shorts to the game. 

The trade: Sell EURUSD at 1.2490 with a stop loss at 1.2540 and a take profit at 1.2290.  The Risk/Reward Ratio is 1:4

Edward J. Moya              

Technical Strategist

WorldWideMarkets Online Trading


Topics: EURUSD, German Economic Data, NFP, euro. euro/dollar. U.D. dollar


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.

Browse our frequently asked questions and find your answers right away.

Access to the educational lessons, webinars and platform walkthroughs.


Get started with a FREE $10,000 Demo Account and experience the Forex Market RISK FREE!