Long or Short: Short
Entry Point: 1.3100 (major resistance on the daily chart)
Stop Loss: 1.3160 (just above the minor psychological number)
Profit Target/s: Initial target at 1.2900, Ultimate target at 1.2700
Reward-to-risk Ratio: 3.33:1 up to 66.67:1
Risk percentage: 1%
Indicators used: Stochastic (14,3,3)
Trade Rationale:
Only the fiscal cliff issue is the wildcard in the U.S. Meanwhile, the euro zone is dealing with uncertain political conditions in Italy, rising peripheral bond yields, and generally fruitless EU group meetings.
On a technical level, I see that the 1.3100 handle is holding like a boss for EUR/USD. With the year near its end, I’m also anticipating a bit of profit taking from the strong EUR rally this month.
Trade Adjustments:
I’ll cancel my trade idea if price doesn’t test 1.3100 again. I’ll trail my stop every 100 pips and consider adding to my position