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EUR/USD

Trading ideas: Sell EUR/USD at 1.1710 after ECB announced its dovish tapering plan

Wojciech Matysiak MyFXspot.com

The euro on Thursday suffered its worst day against the dollar since the UK's Brexit vote nearly two years ago after the European Central Bank unexpectedly indicated that it planned to keep interest rates at record lows into the summer of 2019. That stance contrasts with the steady rate hike campaign that the U.S. Federal Reserve signaled on Wednesday as it dropped its pledge to keep rates low "for some time."

This is how MyFXspot.com trades now:

EUR/USD

Trading strategy: Sell

Open: 1.1710

Target: -

Stop-loss: 1.1810

Recommended size: 1.50 mini lots per $10,000 in your account

Short analysis: Rally towards May 16 high is soundly rejected. The ensuing slide results in a bearish outside daily candle and the pair falling back below the 10 & 21-DSMAs. RSIs are biased down and an monthly inverted hammer candle forms. An offer is placed at 1.1710 and the 2018 low will be targeted at a minimum.

GBP/USD

Trading strategy: Await signal

Open: -

Target: -

Stop-loss: -

Recommended size: -

Short analysis: Abrupt change in direction and bears back in control. Direction now clouded by severe price chop. Pair targets 1.3205 2018's May 29 low, below October 6 low at 1.3027 in focus.

USD/JPY

Trading strategy: Buy

Open: 110.30

Target: 111.90

Stop-loss: 109.50

Recommended size: 2.07 mini lots per $10,000 in your account

Short analysis: We see only limited recovery in USD/JPY today given what happens on other pairs. May high at 111.39 and the weekly Cloud base and downtrend line from Aug 2015 in the 111.90s are in play. We have placed a bid at 110.30.

USD/CAD

Trading strategy: Await signal

Open: -

Target: -

Stop-loss: -

Recommended size: -

Short analysis: The USD/CAD rallies with broad USD strength after dovish ECB hold. The pair rose to two-and-a-half-month high. Global/NAFTA trade tension angst lingering aids USD lift. We stand aside.

AUD/USD

Trading strategy: Sell

Open: 0.7540

Target: -

Stop-loss: 0.7600

Recommended size: 2.50 mini lots per $10,000 in your account

Short analysis: Bear sentiment increases as the 21-DSMA turns into resistance and the daily cloud and trend line off May's low get broken. An inverted monthly hammer candle and falling RSIs bolster bear sentiment. A sell offer is placed at 0.7540 and the target will be the 2018 low at a minimum.

EUR/GBP

Trading strategy: Sell

Open: 0.8750

Target: -

Stop-loss: 0.8810

Recommended size: 1.88 mini lots per $10,000 in your account

Short analysis: The pair falls back below the 100 and 10-DSMAs, RSIs are biased down and the trend line off April's low gets pierced. We have placed a sell order at 0.8750.

Author

Wojciech Matysiak

MyFXspot.com

Wojciech Matysiak is a chief editor and chief economist of MyFXspot.com, currency market analyst and strategies provider.

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