Short Position on EUR/USD: Potential Major Downtrend
I'm entering a short position of 4 lots on
EURUSD
at 1.0865. This trade setup is based on my analysis of recent price action and key support levels. If we break below 1.0827, I believe this will confirm that the top for
EURUSD
is finally in, signaling a strong bearish trend.
Trade Details:
Entry: 1.0865 (Short position)
Confirmation Level: 1.0827 (Break below this to confirm downtrend)
Target: 1.0538 (-1.618 Fibonacci extension)
Technical Analysis:
Entry Point (1.0865): This level represents a key resistance where recent price action has shown signs of selling pressure. Entering at this point allows us to position ourselves ahead of a potential breakdown.
Confirmation Level (1.0827): This is a critical support level that is the .50 fib level of the recent breakout. A decisive break below this level will indicate that bearish momentum is gaining strength, confirming the downtrend.
Target (1.0538): The -1.618 Fibonacci extension from the most recent breakout of structure suggests this as a logical target for the downward move. This level has historical significance and could act as a strong support where the price may stabilize or reverse.
Recent Rally Peak: It appears we are currently at the peak of a sizable rally from 1.06. This rally has driven the
EURUSD
up to our second entry point, and the momentum appears to be weakening, suggesting a potential reversal is imminent.
Supporting Factors:
Bearish Momentum: The recent price action shows lower highs, indicating a bearish trend.
Economic Indicators: Recent economic data from the Eurozone and the U.S. suggest a potential divergence in monetary policy, favoring a stronger USD $DXY.
Market Sentiment: Current market sentiment appears to be risk-off, which typically benefits the USD as a safe-haven currency.
Eurozone Rate Cuts: The Eurozone is projected to cut interest rates in June. This potential rate cut will likely weaken the euro further and be beneficial to the USD
DXY
, adding to the bearish case for
EURUSD
.
U.S. Interest Rate Hike: Additionally, I believe the U.S. will raise interest rates by the end of the year. This expected rate hike would further strengthen the USD
DXY
, adding downward pressure on
EURUSD
.
EURUSD
at 1.0865. This trade setup is based on my analysis of recent price action and key support levels. If we break below 1.0827, I believe this will confirm that the top for
EURUSD
is finally in, signaling a strong bearish trend. Trade Details:
Entry: 1.0865 (Short position)
Confirmation Level: 1.0827 (Break below this to confirm downtrend)
Target: 1.0538 (-1.618 Fibonacci extension)
Technical Analysis:
Entry Point (1.0865): This level represents a key resistance where recent price action has shown signs of selling pressure. Entering at this point allows us to position ourselves ahead of a potential breakdown.
Confirmation Level (1.0827): This is a critical support level that is the .50 fib level of the recent breakout. A decisive break below this level will indicate that bearish momentum is gaining strength, confirming the downtrend.
Target (1.0538): The -1.618 Fibonacci extension from the most recent breakout of structure suggests this as a logical target for the downward move. This level has historical significance and could act as a strong support where the price may stabilize or reverse.
Recent Rally Peak: It appears we are currently at the peak of a sizable rally from 1.06. This rally has driven the
EURUSD
up to our second entry point, and the momentum appears to be weakening, suggesting a potential reversal is imminent. Supporting Factors:
Bearish Momentum: The recent price action shows lower highs, indicating a bearish trend.
Economic Indicators: Recent economic data from the Eurozone and the U.S. suggest a potential divergence in monetary policy, favoring a stronger USD $DXY.
Market Sentiment: Current market sentiment appears to be risk-off, which typically benefits the USD as a safe-haven currency.
Eurozone Rate Cuts: The Eurozone is projected to cut interest rates in June. This potential rate cut will likely weaken the euro further and be beneficial to the USD
DXY
, adding to the bearish case for
EURUSD
. U.S. Interest Rate Hike: Additionally, I believe the U.S. will raise interest rates by the end of the year. This expected rate hike would further strengthen the USD
DXY
, adding downward pressure on
EURUSD
.
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