[B]Long or Short:[/B] Long
[B]Entry Point:[/B] Long at 0.8850
[B]Stop loss:[/B] 0.8800 (below Fib levels)
[B]Profit target:[/B] 0.9950 (previous high)
[B]Risk Percentage:[/B] 1.0%
[B]Reward-to-risk Ratio:[/B] 2:1
[B]Tools used:[/B] Fibonacci retracement
[B]Trade Rationale:[/B]
With the euro zone officials busy pumping up their potential deal over Greece’s next bailout plan, I figured that the euro would get a lift over the next couple of days especially when the EU Summit ends over the weekend. Also, there will only be a handful of reports from the U.K. next week, so we might not see an improvement on the anti-pound sentiment produced by this week’s MPC meeting minutes.
For the technicals, I’m simply trying to play the major and minor levels, with a lil’ help from the Fibos. My entry is right between the 38.2% and 50.0% Fibos, and my stop is below those levels. I placed my profit target at the previous high (.8950).
[B]Trade Adjustment:[/B]
Since it’s pretty easy to spot if the pair has already broken through the Fibo levels, I can close the trade early if the trade goes against me. If the pair goes up and closes a daily candle above .8900, I will move my stop to break even and wait for the pair to hit my profit target (unless there’s a big news in the euro zone like Greece defaulting, or Angela Merkel punching Papandreou)