Fundamental analysis:
EURO
Bearish:
10 point rate cut announced by the European Central Bank (ECB) and they have already been cutting rates before
20 billion per month in asset purchases
Looming economic crisis in the Eurozone
A lot of retail traders are now long upon the rally after the ECB announcement so there is a large zone of liquidity in the underlying zone of 1.10 000 - 1.09 250 (but there is also a lot of liquidity from people like me that decide to follow the trend and short so be wary).
USD
Bullish:
Strong currency since trump took over presidency
Strong economic growth
Considered a safe haven currency
There is a downtrend in the EURUSD for over a few months.
Overal bias for me is that I am now shorting a "risk" currency against a "safe haven currency".
Technical analysis:
We have tapped the downward sloping trend line at around 1.11 060. The 1.11 000 (weekly level) is now the resistance region, and also correlates perfectly with the 38.00% fibonacci retracement on the weekly chart, since the EURUSD has been in a downtrend for quite some time now I feel no need to go against the trend and just follow it down. There is a possibility for it to run up to the outer band on the Bollinger band at around 1.11500. That would be a great short entry and it would trump mine.
Opened short at 1.11010, stoploss for me would be around 1.11550.
First profit taking target for me would be the 1.10 500 level at the 20 day moving average (as a conservative TP 1).
The rest of my trade I will want to let it run to 1.10 000 (psychological round number level = TP2) and 1.09 250 as a TP3.
I also opened a low leverage trade towards the 1.00000 level in the long term, since I believe the dollar will continue gaining strength, and the euro will continue to take a beating against the safer, stronger currencies.
Please provide feedback to open discussion.
EURO
Bearish:
10 point rate cut announced by the European Central Bank (ECB) and they have already been cutting rates before
20 billion per month in asset purchases
Looming economic crisis in the Eurozone
A lot of retail traders are now long upon the rally after the ECB announcement so there is a large zone of liquidity in the underlying zone of 1.10 000 - 1.09 250 (but there is also a lot of liquidity from people like me that decide to follow the trend and short so be wary).
USD
Bullish:
Strong currency since trump took over presidency
Strong economic growth
Considered a safe haven currency
There is a downtrend in the EURUSD for over a few months.
Overal bias for me is that I am now shorting a "risk" currency against a "safe haven currency".
Technical analysis:
We have tapped the downward sloping trend line at around 1.11 060. The 1.11 000 (weekly level) is now the resistance region, and also correlates perfectly with the 38.00% fibonacci retracement on the weekly chart, since the EURUSD has been in a downtrend for quite some time now I feel no need to go against the trend and just follow it down. There is a possibility for it to run up to the outer band on the Bollinger band at around 1.11500. That would be a great short entry and it would trump mine.
Opened short at 1.11010, stoploss for me would be around 1.11550.
First profit taking target for me would be the 1.10 500 level at the 20 day moving average (as a conservative TP 1).
The rest of my trade I will want to let it run to 1.10 000 (psychological round number level = TP2) and 1.09 250 as a TP3.
I also opened a low leverage trade towards the 1.00000 level in the long term, since I believe the dollar will continue gaining strength, and the euro will continue to take a beating against the safer, stronger currencies.
Please provide feedback to open discussion.
Comment:
TP 1 and TP 2 met.