Trading Forex – EUR/USD More Downside?

Posted on 22. Sep, 2011 by in Forex Signals, How To, Random Noise

Yesterday in the beginning of the US session we did see some upside on EUR/USD, trading all the way up to the 1.3800 level, which probably was partially due to some pre-sentiment before the rate decision and press conference, as well as recent talk about the next aid tranche for Greece.

However, at the press conference and the statement “here are significant downside risks to the economic outlook, including strains in global financial markets”, we saw an immediate push down on EUR/USD which continued throughout the Asian session. The pair currently trades around the 1.3560 level.

Trading Forex – Bias

My overall bias on EUR/USD is still that we are likely to see further downside. We do have Unemployment Claims coming out today, which is expected to come in at 419K compared to 428K previous release. A better than expected release could give us the second push to the downside. Right now after yesterday’s drop, I would prefer to wait for a tiny pullback, but I think we are likely to see lower lows within a short period of time.

Trading Forex – Technical Perspective

As mentioned, EUR/USD is currently trading around the 1.3560 level. The 1.3500 level is likely to hold as support for now, both in terms of a psychological level as well as strong level of support based on the previous bounce at that level. Right now the pair is forming somewhat of a double bottom at this very level.

I think we are likely to see a pullback to the 1.3630 – 1.3650 level. If we do see this level being hit just around US open today I think a short trade could be in the cards with a 50 – 70 pip stop loss.

Trading Forex – Ideas

With the above mentioned aspects in mind, I am mainly looking for a short trade.

Even though I think we are likely to see a bit of pullback before the pair continues down, I would prefer to wait for this pullback and then take a short trade. I will pay close attention to the 1.3630 – 1.3650 level. If we reach this level around US open and see a bit of range trading around this level, I will be looking to take a short trade with a 50 – 70 pip stop loss, all depending on a possible entry.

Trading Forex – Money Management

Trading forex is all about keeping a close eye on money management. Never risk more a couple of percentages of your account balance on any given trade.

Related posts:

  1. Trading Forex – EUR/USD Ready for Further Downside
  2. Trading Forex – AUD/USD Further downside
  3. Trading Forex – Cable Up for Further Downside
  4. EUR/USD – Downside Before FOMC Statement?
  5. Trading Forex – A look at EUR/USD

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