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Looking ot Sell Euro Below 1.12 Figure

Looking ot Sell Euro Below 1.12 Figure

The Euro seems to be resuming downward momentum after recoiling from trend line resistance capping gains against the US Dollar since late late May. Entering short seems attractive from a technical perspective and would be in line with my fundamental outlook. However, risk/reward considerations are a bit off with prices too close to the first layer of support at 1.1067, the 23.6% Fibonacci expansion and the trade's would-be initial target.

With that in mind, I will set up an entry order to sell the pair at 1.1150. If triggered, the trade will carry a stop-loss activated on a daily close above the August 11 high at 1.1192. Conveniently enough, meeting this condition would not only breach the latest swing high but also take out trend line resistance, thereby acting as firm invalidation of a near-term bearish bias. If the trade hits 1.1067 after going live, I will book profit on half of the position and move the stop-loss to the breakeven on remaining exposure, leaving it to capture any follow-on weakness.

To see the chart showing this setup, CLICK HERE

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.