Our Forex Buy/Sell Trading Signals currently indicate that the Euro may fall to fresh lows against the US dollar, but should you place a short trade? The DailyFX+ Currency Trading Signals “Breakout” system sold the EURUSD at 1.4017 and set stops at 1.4338—hardly a trade for the faint at heart. Yet its profit targets range from an initial 1.3937 to a fourth price target of 1.3696, and a continued breakdown in the Euro would clearly make for a profitable trade.
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Yet a more discretionary analysis of the EURUSD suggests that such a strong 300+ decline is somewhat unlikely; our technical analyst calls for a short-term bounce in his EURUSD technical outlook, while Currency Analyst John Kicklighter feels that the US dollar may decline on lower Fed rate expectations. While we cannot and will not rule out a strong EURUSD breakdown, it seems that the best risk-reward will be found buying declines through near-term forex trading.
For more information and guides on using our DailyFX Buy/Sell Signals, see our Weekly Forex Trading Strategy Outlook report.