EURUSD Pullback Long Setup

FX:EURUSD   Euro / U.S. Dollar
EURUSD has almost reached 61.8% retracement of its setup bullish leg. Demand is expected to enter around this area. Limit buy orders at 1.1630, the 61.8% retracement area, and stops around previous low of 1.1528 is the trade setup. The context to the left of the chart is quite bearish , making this a lower probability reversal trade with a decent reward for risk. 2R-3R targets are achievable if buyers prevail here. This trade setup should be approached with caution and strict trade & risk management.


The EURUSD rate breaks again below the previously exceeded resistance zone and I think it looks very much like a breakout. Thus, from a purely technical perspective, the longer-term consolidation would be intact again. On the daily chart, the next target could be $ 1.16 per euro. There is also the lower trend line, which marks the secondary, since early 2017 existing upward trend. Falling below the trendline could push the EURUSD back towards the horizontal support line at $ 1.1500. Some influencing factors currently appear to weigh on the euro. On the one hand, the US dollar generally gains in value as a safe-haven currency for trading-conflict reasons, and therefore also against the euro. On the other hand, some monetary policy statements have spread some uncertainty. For example, an ECB report on Wednesday revealed that there was disagreement within the European Central Bank as to when the actual rate hike should occur in 2019. In addition to this aspect, the ECB minutes appeared on Thursday, but the barely "hawkishe" statements included, so broadly confirmed what they said in the statement and after the euro had collapsed against the USD.

Fundamentally, economic data are few and far between this week. The focus was on the ZEW indices, which turned out to be more than just bad, but also well below expectations. The ZEW Indicator of Economic Trends plummeted for the fourth month in a row, the strongest of all four months.

@Lyiness, thank you for your informative comment. Bearishness is still very much there in higher TFs but if this turns out to be the low of this swing, the reward for risk is very good, at the cost of lower probability as always.
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