WorldWideMarkets Community

Forex Trading, Market News & Technical Analysis

Today’s Trading Edge: EUR/USD may form a bearish Butterfly pattern around the 1.0740 zone

Posted by Edward Moya on Mar 17, 2015 8:14:00 AM


EUR/USD began 2015 in the midst of a strong selloff that has been firmly in place since price respected the 1.40 handle in May of 2014.  Last week, the euro fell below the $1.05 level for the first time in 12 years.  The bearish bias remains firmly in place, but with the recent consolidation that has taken place over the past few trading sessions, we may see slight recovery here. 

Price action on the 240-minute EUR/USD chart shows that if the recent rally continues to the 1.0740 zone, we may see a bearish butterfly pattern form and key trendline resistance trigger a resumption of the downward move.  Point D may be confirmed by both the 261.8% Fibonacci expansion of the B to C move and the 127.2% Fibonacci expansion level of the X to A decline.

Even if we see this tentative rebound take out the 1.0750 – 1.08 region, the bearish run is far from over.  Key downside targets include the 1.0250 level, followed by 1.0050. 

The trade: Sell EUR/USD 1.0740, with a stop loss at 1.0810 and take profit at 1.06.  The risk/reward ratio is 1:2

Edward J. Moya

Senior Market Strategist

WorldWideMarkets Online Trading

Topics: EURUSD, EURO, Euro Zone


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!