We have just entered the new month and trend establishing positions will be executed over the next few days. That said, it should be borne in mind that event risk is still high for the week, with meetings today, and NFP on Friday. The Euro could very well not pullback for entries, in which case, this trade will be relinquished to the recycle bin.
Entry 1 @ 1.3300 10/20% weighted
Entry 2 @ 13320/25 30/40% weighted
Entry 3 @ 13330/40 40/60% weighted
Weighting is determined by the quality of the sell signals at the entry points. Ideally entry 3 should be heaviest, or at least equal to entry 2.
Targets as shown on the chart.
This trade ties in nicely with an early entry at point B of a , looking to exit at point C for the leg up to point D. It also lines up well with the larger leg up, being an impulsive first wave move, transitioning into a second wave correction. Statistically speaking, there is a 73% chance of a 50-61.8% pullback.
Yesterday's statement did not dismiss the possibility of tapering; that being said, it should be assumed that the Euro will weaken against the $ on a fundamental basis as tapering starts to kick in. Should tapering commence this year then the $ should start it's trend to a more equal footing, as can be seen, if one looks back far enough on a chart. Should tapering not materialise then any gained dollar strength should be neutralised before determining a position of strength, or weakness, for the EUR vs USD.