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Forex: Ideas You Can Trade - EURUSD Downside Target 1.0820

Posted by Steven Hatzakis on Jul 16, 2015 1:01:00 PM

EURUSD: May low near 1.08 approaches and trend develops bearish bias despite choppy volatility and even after Greece deal moves ahead

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 1.0877 - and just off session lows of 1.0854 after falling from a high of 1.0947 today.

Last time this pair was reviewed in Ideas You Can Trade was on June 22nd, nearly a month ago, when the pair was holding above 1.13 - and has since failed to regain it and has trended in a choppy sideways market that has slowly become more bearish (with lower-highs and lower-lows).

With the major theme still Greece and despite Athens voting last night to accept another EU-proposed bailout, comments today from ECB president Mario Draghi coincided with a volatility spike  -yet wasn't enough to reverse the bearish trend bias that has been developing. 

It looks like today's low is not yet the bottom for the pair in the short term, and even though the 1.0820 downside target looks conservative, a bounce higher again could precede a push under 1.0800. Therefore, traders may look to take small risk/reward positions or face large swings from high volatility that has recently become the "normal."  

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

1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.0951 with a Limit to take profit @ 1.1000 and a stop-loss @ 1.0902 Risk/Reward Summary: Limit risk = +49 pips profit / (-49) Stop-loss risk = Gain to Loss ratio = 1.00

2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.0853 with a Limit to take profit @ 1.0820 and a stop-loss @ 1.0882 Risk/Reward Summary: Limit risk = +33 pips profit / (-29) Stop-loss risk = Gain to Loss Ratio = 1.13

Medium term daily candle chart (zoomedin):

EURUSDDaily July 16 2015 note zoomedin

Medium term daily candle chart:

EURUSDDaily July 16  2015 note

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


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