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Forex: Ideas You Can Trade - EURUSD Back Under 1.08

Posted by Steven Hatzakis on Apr 8, 2015 3:25:00 PM

EURUSD: Bearish momentum returns within trading range as pair heads lower in last three days after 1.10 missed 

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 1.0791 around time of publication today - and is lower for the third straight trading day.

Last time EURUSD was reviewed in Ideas You Can Trade the trend appeared bearish - yet briefly reversed higher towards 1.1050 - but that level again proved to be a resistance barrier and the pair has since returned towards current prices after failing to hold above 1.10. Therefore, unless 1.10 is regained, the short term direction seems bearish again.

If the bearish momentum of the last three days continues then a lower-low should follow with 1.07 a possible support area and the March low above 1.04 the next downside support target. In addition, the upper line of the medium term bearish channel (see purple channel on chart below) may act as bearish support and ease the descent (whereas a break back into the channel could speed up the drop).

Below are examples of how to trade a bearish continuation or a bullish reversal:

1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.0905 with a Limit to take profit @ 1.1023 and a stop-loss @ 1.0843 Risk/Reward Summary: Limit risk = +118 pips profit / (-62) Stop-loss risk = Gain to Loss ratio = 1.90

2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.0761 with a Limit to take profit @ 1.0691 and a stop-loss @ 1.0825 Risk/Reward Summary: Limit risk = +70 pips profit / (-64) Stop-loss risk = Gain to Loss Ratio = 1.09

Medium term daily candle chart (Zoomed-in):

EURUSDDaily April 8 2015 note

Topics: EURUSD, EURO, forex trading, technical analysis, USD, $EUR

 

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