The EUR/USD is in the midst of a corrective move following the big impulsive move. Therefore, our plan should be to look for a short entry to rejoin the overall trend in time for another impulsive sequence. Looking at current price action, we can see the 50% retrace of the latest impulsive move has held up, this coupled with an overall formation and a well defined zone are enough to make us interested sellers. A break of the ascending trend-line and price ascending trend-line will be strong confirmation and a good reason to move the stop to break-even. Our basic trading plan is outlined on the chart: entry short at 1.2575, with a 45 pip stop at 1.2610, and a 175 pip profit target at 1.2400. This simple trade has a risk:reward ratio of close to 4 to 1. The alternate option of trailing our stop is very viable with this type of trade as it is a clear with-the-trend trade.
I totally agree with you on the overall direction and the bounce but I believe that it will reach 1.2575 at a minimum but extend to 1.2595; I'm accounting for the manipulation to take out some stops. I"m looking at price action on the lower time frames (15/30) to judge my entry to go short. My SL will be roughly 10-20 pips away depending on the entry. I'm with you on the set up.