BACK TO THE EURO - I haven't talked about the Euro for some time as far as strategy is concerned, but today I'm finally ready to start talking EURUSD again. It's not that I don't like the Euro, we just haven't seen any compelling set ups in this major pair for some time. But after the move we saw on Wednesday, EURUSD is finally back on my radar and I will be looking to trade it over the coming sessions. Now just because it's on my radar doesn't mean the trade is there for me to take right now. First things first, what is the trade? Well, the trade I'm looking at is a EURUSD short trade. Although we have been rallying over the past few sessions, it's important to be able to take a step back and understand the rally within the context of the weekly chart.
IDEAL TRADE - If you look at the weekly chart, it becomes quite apparent that this market is locked within a very well defined downtrend. Having said that, there is no better trade to take than fading an overdone market that is moving in the opposite direction of the larger trend. In this case, the Euro could start to look overdone if it keeps pushing higher, but it will still be in a downtrend. This makes selling into the rally highly attractive. But where will I sell. Right now the Euro has broken above 1.1200 to trade to the 61.8% fib retrace off of the May-July move. I'm thinking we could see one more push that takes us up through 1.1300 and that is where I will look to sell.
This analysis is for informational and educational purposes only. This is not a recommendation to buy or sell anything. MarketPunks is not a financial advisor and this does not constitute investment advice. All of the information contained herein should be independently verified and confirmed. Please be aware of the risks involved with trading in currencies, stocks, commodities, cryptocurrencies and sports. Do not trade with money you cannot afford to lose. It is recommended that you consult a qualified financial advisor before making any investment decisions.
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