The Euro has been a dominating force to be reckoned with in the currency market. Every step of the way the US dollar has been rebuffed and pushed back in 2011. Looking to our daily chart, we can see the EUR.USD began the last leg of its bull run in January of 2011 at a low of 1.2874. This move has continued and printed a high of 1.4350 for an astounding 1,476 pip move in three months!
The strength of the EUR/USD trend can be determined by how many times price has tested and failed to break through its established trend line. Currently there have been multiple tests along the way allowing for the savvy trend trader to enter the market and take profits successfully. Not being able to spot this strong trend early could have been potentially perilous for your account balance!
Taking price in to a 4hr chart, we can see the EUR/USD continuing to print higher highs and higher lows along our trend line. Trend traders have had multiple opportunities to buy into the trend as price retraces and touches the rising support levels along the way. Anxious sellers are held on standby mode waiting for prices to break lower below our strong 4hr trend before they can enter the market.
Our strong trend line allows us a clear direction for our entry. Traders can look to establish fresh buy orders along our trend line near the 1.4225 level. Stops should be placed below our trend line near the 1.4150 handle. Using a 1:2 Risk/Reward ratio, limits should be targeting 1.4375 or higher for a minimum profit of 150 pips.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.