Trading Forex – EUR/USD Continuation?

Posted on 04. Oct, 2011 by Jakob in Forex Signals, How To, Random Noise

Trading Forex in a profitable manner requires patience and the ability to follow ones plan. Recent ideas shared here on TradeProfits should be a good indication of exactly that. Now as we are in the week which will end with NFP from US, and lots of other factors to take into consideration, we need to play things carefully. With the recent strong drop in EUR/USD, it can be argued that taking a long would be suicidal, but then again, with a drop like the one we have seen, a pullback is always a possibility.

Trading Forex – Bias

My bias on EUR/USD is still that we are likely to see further downside. The pair currently trades around the 1.3240 level. The 1.3000 level would be the next natural level to test to the downside. However, in a downtrend I would prefer to sell on the pullbacks. One reason why a pullback is in the cards, it due to the already strong move down we have seen. After significant moves, profit taking will take place and a pullback will occur. Another reason is that the USD index is coming very close to the 200 EMA;

a level which tends to evoke strong price reactions. If the USD will bounce of the 200 EMA and ease the momentum, dollar crosses will obviously be affected as well. By the look of the eye on the EUR/USD chart, there is currently not a whole lot holding us back at this level before further continuation, but the dollar index does give a small hint, that a pullback could be around the corner.

Trading Forex – Technical Perspective

As mentioned above, the pair is clearly in a strong downtrend, but waiting for a pullback and then taking a short trade would be preferable, in my opinion. I am looking for the 1.3380 – 1.3400 level and then the 1.3520 – 1.3540 level.

In case a trade should be triggered, as mentioned above, the 1.3000 level is the next level which would be ideal for a profit target; looking at the charts, the 1.2900 level actually seems far more important, but nonetheless, the 1.3000 level is likely to show support due to this being a psychological number.

Trading Forex – Ideas

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

Trading Forex – Plan Your Trade and Trade Your Plan

Here is a perfect example of a good plan. There is no guarantee that things will work out. The trade might not get triggered because the pair will continue down. The trade might get triggered and then maybe stopped out. Anyhow, the plan is there, and if the trade gets triggered we don’t have to worry about it as all the details are in place, and the risk on this trade is low if it does trigger. Trading Forex is about planning and proper execution of the same.

Related posts:

1. Beautiful Breakout – Pullback – Continuation Setup
2. Trading Forex – EUR/USD More Downside?
3. Trading Forex – A look at EUR/USD
4. Trading Forex – EUR/USD
5. Trading Forex – EUR/USD Up or Down?

Tags: EUR/USD, Trading Forex