EUR/USD – Potential Upside?

Posted on 18. Apr, 2011 by in Forex Signals, How To, Random Noise

Shortly after London open this morning EUR/USD started to move down, and the press report from Greece stating they asked for restructuring of its debt gave the pair extra downside momentum. This was short-lived as news about a denial from Greece about the press report hit the wires, which made EUR/USD rally back to the level of its initial breakout. However, the pair did continue to dip lower throughout the day until 15.00 CET when we got news about S&P’s downgrade on outlook to the US sovereign credit rating. This gave us a quick but strong spike to the upside, and then the pair slowly continued to drop further down. About 15 minutes before London close, the pair started to head back up and it currently trades around the 1.4230 level.

Currently the pair trades below the weekly bearish trend line and also below the daily bullish trend line. This clearly gives us an idea of possible downside to the pair. However, it does currently trade around a key level of support with the swing high which was made back in November 2010. So I am definitely paying close attention to this level, tomorrow morning around the London open.

Trading Ideas

With this in mind, my bias on pair is still to the upside and now, with this kind of pullback, I think the pair does set up perfectly for a possible long trade.

A break (which has already taken place) and close below 1.4216 could give us a possible setup for a short trade with a profit target around 1.4080. Hence this is more of an intraday play where you really need to focus on price action and technical analysis in order to pin-point your entry – Simply because if you don’t, if will be very difficult to get a good risk:reward out of such a trade.
My bias for tomorrow is probably to the upside and if price action allows for it, this is what I will try to trade, everything else being equal. Pay attention to news flow, price action, and the time of the day, and this should be a good chance to get in on a long trade. There is lots of possible upside so I don’t mind going in with a bit of more a stop loss on such a trade.

Related posts:

  1. Trading Forex – Cable Upside?
  2. Trading Forex – EUR/USD – A Perfect Play and Upside
  3. EUR/USD – 1.4960 Today?
  4. Trading Forex – A bit of Possible Upside
  5. Trading Forex – EUR/USD & Greece Default

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