The current dead cat bounce in the Euro is impressive but is also an opportunity to open a short position in the EUR/USD pair. Price is getting squeezed between the rising support line drawn from 2000 and the falling resistance from the top of July 2008. Good places to increase the short position gradually is right now at 1.128, then the top of the falling resistance channel at 1.15, and finally the .236 Fib line at 1.165. Your stoploss should be decided based on taste, but 1.20 seems reasonable. The initial target is 1.04. Further targets can be determined once we reach the first one, targets as tempting as 0.82. As it stands, this trade has a 1.7 to 2.5 risk reward ratio based on how you position your short entries.
I have to say I'm not much of a currency expert, but this my simple prediction from what I see.
I have to say I'm not much of a currency expert, but this my simple prediction from what I see.
Trade closed: stop reached:
Stoploss hit at 1.20. Will wait for a reversal before re-entering this short.
