EUR/USD – The Week Ahead

Posted on 17. Apr, 2011 by Jakob in Forex Signals, How To, Random Noise

Let’s first take a look at EUR/USD from a weekly perspective then we will see that the pair has formed a weekly candlestick looking something like a possible spinning top, give us a clue of potential downside. The range of last week was fairly narrow with no real follow through. A high of 1.4520 and the limited downside of 1.4360 gave us a choppy week for EUR/USD.

From a weekly perspective, we have clearly broken the bearish trend line starting back in July 2008. With this trend line being former resistance, this should now hold as support. With the break of the key level of 1.4520, the next likely level to the upside seems to be just around the 1.4980 level.

Looking at the daily chart we have a strong bullish trend line supporting further upside along with a key level of support around the 1.4217 level. There seems to be a good level of confluence support around 1.4260 with the two trend lines lining up and the key level of support just about 40 pips away. So a pullback to this level could prove to be a good point of entry for a long trade with a SL of 60 – 100 pips, which still should provide a good risk:reward ratio.

Trading Ideas

Overall my bias on the longer timeframe is clearly to the upside but that does not mean a pullback isn´t possible. With that in mind, try to do your best, trading what you see and not what you think. I will be looking for:

A break of the lower part of the range around 1.4360 could give us a possibility to get into a short trade with a profit target around the confluence level at 1.4260. Look for momentum around a session open or close, in order to get in with a small stop loss in order to maximize the risk:reward of the possible trade.

A break of the upper part of the range around 1.4520 could give us a chance to get in on a long trade with a profit target around the aforementioned key level of 1.4980. A stop below 1.4360 could save you from a possible fake out, and in case of continuation the risk:reward should still be favorable.

Tags: EUR/USD, forex signal, forex trading, Trading Forex

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One Response to “EUR/USD – The Week Ahead”

Jakob says:

June 14, 2011 at 12:36

Hi,
This is testing.

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