EURUSD: 2012 Low Surpassed with Downtrend Approaching 2010 low as New Year Begins
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 1.2050 around time of publication today.
The pair opened lower after the holiday trading schedule, and briefly touched under the 2012 low, thus reaching a new low that hadn't been reached since 2010, as 2015 begins. Last time EURUSD was reviewed in Ideas You Can Trade, in December, the pair was desperately in need of support to curb the downtrend but that support (above 1.2400) never materialized.
1.1875 was the area near the 2010 low which may be the next downside support target that could actually give the EURUSD a needed recovery, whereas the pair could recover from current levels if the 2012 low near 1.2040 holds.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.2264 with a Limit to take profit @ 1.2400 and a stop-loss @ 1.2155 Risk/Reward Summary: Limit risk = +136 pips profit / (-109) Stop-loss risk = Gain to Loss ratio = 1.24
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.2033 with a Limit to take profit @ 1.2001 and a stop-loss @ 1.2054 Risk/Reward Summary: Limit risk = +32 pips profit / (-21) Stop-loss risk = Gain to Loss Ratio = 1.52
Medium Term Daily Candle Chart:
Longer Term Weekly Candle Chart: