I mentioned in my Pre-Week Market Analysis on Monday that I was bearish on EUR/USD. I also stated that I was looking to short the pair once it pulls back to a higher price. I think the time has come to finally sell the pair!
As you can see, the pair has finally found its way to the 200 SMA and Fibonacci retracement levels. With the Stochastic showing that conditions are overbought, I think we'll see price find resistance around the 1.3500 level. My bearish bias is also confirmed by the "lower highs" that the pair has been making.
So, once the pair tests the 61.8% Fib, I will pull the trigger and go short. I will place my stop at 1.3550, well above the 200-SMA and 78.6% Fib. I'm ultimately aiming for new lows, but I will take part of my position off the table if the pair tests the most recent swing low at 1.3360.
On the fundamental side of things, I think that the upcoming G20 meeting this weekend will be generally bearish for the euro. Forex Gump talked about how the shared currency seems to be in a tug-of-war with policymakers voicing out their opinions on its recent strength. In this silly little barista girl's opinion, we could see the euro trade lower if the debates carry on further.
To recap, here's my plan:
Short EUR/USD at 1.3490. PT1 at 1.3360. PT2 yet to be determined. Stop loss at 1.3550. Risk disclosure.
There ya have it! That's my trade idea for today. What's yours? Tell me all about it by writing in the comments section below, Facebook, Twitter, or Meetpips!
(Originally posted from my blog, The Loonie Adventures of a Forex Noob)