Trade tension between the US and China are contributing to the recent USD strength at the time of this writing. New tariffs on China may lead to a retaliation, causing some nervousness in global markets.
As a result the focus on the Non-Farm Payrolls (NFP) may be limited, however, some reaction is often seen when the US employment figures are released.
Initiating a trade at market price prior to the NFP may require a larger protective stop due to the volatile market conditions that are often seen upon the release of the figures.
Our strategy is fairly straightforward, a buy limit order may be more appropriate. I highlighted on the chart the key levels in EURUSD. Do note that this setup is for experienced technical traders only.
An appropriate entry price may be at 1.1547, protective stop layered at 1.1500, targeting 1.1620.
The estimated duration for the strategy is no longer than 30 - 45 minutes. The risk ratio is poor but it is a short-term strategy. I must also highlight the risk of exercising the strategy as significant volatility may be seen. Over-leveraging is not encouraged. The aim of the protective stop is to contain losses rather than prevent losses.
I will rarely post trade ideas with an entry, stop and take profit in tradingview, this is an exception. In an event EURUSD will continue trading lower prior to the NFP where it is only 40 pips from the entry price I suggest to cancel the order. In an event EURUSD does not trigger the entry within 15 minutes after the release I suggest to cancel the buy limit order.
Comment
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EURUSD spiked lower but failed to trigger the order. The first support line we highlighted on the chart is containing the weakness at the time of this writing. It is difficult to determine whether it will indeed hold but I expected a larger dip, which did not materialize.