A Look At EUR/USD Before Stress Tests & The FOMC
- EUR/USD rolling over?
- 1.2580 area looks key
Unfamiliar with Gann Square Root Relationships? Learn more about them HERE.
There is no shortage of trading catalysts in EUR/USD over the next few days as the ECB announces the results of its bank stress tests on Sunday and the FOMC decides whether or not it will proceed with tapering on Wednesday. Our work with cycles and other timing methods suggests the euro should soon resume its broader downtrend, but there is some risk we get a final stab higher early next week (and possibly even into the start of the following week). As such, we like selling the euro around 1.2800 if it gets there with a stop somewhere above the 50-day moving average. On the downside, the 78.6% retracement of the month’s range near 1.2580 looks to be an important pivot and a close below this level would signal that the broader downtrend has already resumed.
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EUR/USD Daily Chart: October 24, 2014
Charts Created using Marketscope – Prepared by Kristian Kerr
Key Event Risk in the Week Ahead:
LEVELS TO WATCH
Resistance: 1.2780 (Gann), 1.2835 (Gann)
Support: 1.2610 (Gann), 1.2580 (Fibonacci)
Strategy: Sell EUR/USD
Entry: Sell EUR/USD at 1.2780
Stop: 1-day close above the 50-day moving average
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
To contact Kristian, e-mail firstname.lastname@example.org. Follow me on Twitter at@KKerrFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.