Strategy: Short at 1.2556, Targeting 1.2398
Prices put in a Bearish Engulfing candlestick pattern below resistance at the top of a Rising Wedge pattern carved out since late July, hinting a move lower is ahead. A rebound following the setup’s formation has improved risk/reward parameters and we will now enter a small short position, initially targeting 1.2398. A daily close below this barrier would complete the Wedge reversal and we would likely add to the trade at that point as the larger EURUSD down trend continues. A stop-loss will be activated on a daily close above 1.2588.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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