A new government for both Italy and Spain in the past 2 weeks has provided temporary relief to the selling pressure on the Euro. The bias still remains negative for the outlook on the Euro, but these new governments has allowed the oversold technical measures to be relieved. This gives us an opportunity to enter into the pair as sellers.
The EURUSD is approaching a downward sloping resistance line in place since October 27, 2011. This gives us a technical reason to enter the trade as a seller. To confirm the trade, wait for the price to reach the black line and for the MACD line (red line) to cross below the Signal Line (blue line).
Place a stop loss just above the black resistance trend line and above last Friday’s high near 1.3620.
Look to take profits at least twice the distance of your stop loss. So if your stop loss is 100 pips, then look for at least 200 pips of profit potential.
Learn more about trading with MACD by utilizing these resources.
MACD: Triggering Trades in Oscillating Markets
Enter the DailyFX Education Live Classroom
Additional Resources
How to Trade with Support and Resistance
---Written by Jeremy Wagner, Lead Trading Instructor, DailyFX Education
Follow me on Twitter at @JWagnerFXTrader.
