Monday, June 10, 2013

EUR/USD short (and stay short) below 1.32

If you have been watching / trading the EUR/USD lately you've probably noticed the sudden spike on the 6th of this month. I love those spikes in the market because I can apply my Fibonacci retracement levels on them (see simplified image to the right). Usually I'm pretty successful with those, but it really depends on the market conditions before I actually execute a trade. For instance, this is one of those opportunities I'd like to share.

As you can see on the chart (click for a bigger image), there's two boxes; one at the topmost and one that's right below, these are trading ranges where the currency pair has been trading in. As you can see, every time the $EURUSD breaks blow a certain price level it starts trading to the next Fib level. In other words, if the $EURUSD price sinks below 1.3187 one can expect the price to drop towards 1.3163 etc. The opposite is true as well, if the price breaks through around 1.3216 the price of the $EURUSD is likely to go higher.

According to a trusted resource (Dukascopy) the currency pair will be trading around, what I call 'normal' levels, 1.30.

Great opportunity! Short the EUR/USD and set your SL to 1.3216 if your margin allows and your target to 1.3160.

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