Last week, I rode the downtrend on GBP/USD. This time, I’m going to try out EUR/USD. I hope I’m not too late! As you can see, the pair seems to be starting to retrace. It had hit a bottom just below 1.2700 and then suddenly surged higher. To me, this is a good time to consider selling, as I may get in at a good price!
I’m hoping to jump in somewhere between the 38.2% and 61.8% Fibonacci retracement levels. I have set a limit sell tentatively at 1.2760. I could still change it depending on how price action plays out in the next couple of hours though. I’m also keeping a close eye on Stochastic.
As for my stop, I’ve placed it 70 pips away just to give my trade enough room to breathe. I’ll ultimately be aiming for new lows but I could close early if price stalls at 1.2700.
Fundamentally, Europe’s debt crisis situation still looks far from promising. In fact, according to Pip Diddy, the ECB just stopped providing liquidity to some very undercapitalized Greek banks yesterday. Yikes!
It seems to me that with each passing day, the prospect of a Grexit becomes more and more real as bad news from the region pop out one after another. This is why I’m still bearish on the euro.
To recap, here’s my trade idea:
Sell at 1.2760, SL at 1.2830, PT to be determined, 1% risk. (Risk disclosure.)
Cross-posted from my blog, The Loonie Adventures of a Forex Noob