News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
EUR/USD New Trending Chances Created Under 1.4075

EUR/USD New Trending Chances Created Under 1.4075

Walker England, Trading Instructor,

The EUR/USD has been the model of volatility since the breakout occurring on July 8th. This breakout ended the large consolidating triangle that has been forming since our May 8th high at 1.4938. Even though price has traded as much as 1100 pips lower, price is retracing back to previous support (now resistance at 1.4250. This will give traders chances to join the next wave of the breakout during the present pullback.

Fundamentally, both the Euro and the US Dollar both have their issues. The Euro however leads the pack in regards to bad news with its debt crisis now looking to extend into Italy. Today’s Banking Stress Test, See Economic Calendar , may be the catalyst for a further decline and a resumption of our newly formed trend.

EUR.USD__New_Trending_Chances_Created_Under_1.4075_body_Picture_1.png, EUR/USD New Trending Chances Created Under 1.4075

Price Action

Moving to a 4H chart, we can clearly see the backside attack on our longer term resistance level at 1.4250. This level, 1.4250, also formed resistance on a descending triangle created by aligning with the July 3rd high at 1.4529. As we watch a bounce off of resistance, sellers can look to current support near the 1.4100 for our next breakout signaling a resumption of our trend.

EUR.USD__New_Trending_Chances_Created_Under_1.4075_body_Picture_2.png, EUR/USD New Trending Chances Created Under 1.4075

Trading Opportunity

My preference is to sell the EUR/USD under June 16th low placing entry’s near 1.4070. Stops should be placed above support over 1.4250 risking 180 pips on the position. Limits should be set at a minimum profit of 360 pips at 1.3710 or better.

Alternative scenarios include price breaking above current resistance, retesting the 1.4250 handle.

Walker England contributes to the Instructor Trading Tips articles. To receive more timely notifications on his reports, email instructor@dailyfx.com to be added to the distribution list.

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

DISCLOSURES