We normally trade the 61.8% retracement to get a better Risk:Reward ratio, but in this case, the 50% Fibonacci retrace lines up with a price level that has served both as a support and a resistance in the past. We expect that it will act as a resistance once again, seeing that the last high on the 4-hour chart did not manage to climb above the previous one. Our initial target will be at the 27.2% extension, but the trade will be managed by moving the Stop Loss with swings should the predicted down move become a reality. In case we are able to lock in a decent profit, we will consider removing the profit target to give the trade a chance to go much lower, based on the fact that we might be starting a new down move on the Weekly chart after a third bounce off the weekly 50% retrace.
Trade active:
Trade activated and filled at 0.78437