EUR/USD: Shorting at the Previous Day High

Trade Idea: 2011-11-17 2:10

After losing 1% on my last trade, there’s nothing else I want more than to win. Hopefully my trade idea on EUR/USD works out as I hope it would. *fingers crossed*

EUR/USD 1-Hour Chart

Because I don’t see any reason why the euro would rally in today’s trading, I’m just gonna go with the trend. On the 15-minute chart, we see that EUR/USD is already overbought.

However, like my momma always told me, “Don’t settle for the first boy who gives you flowers after a breakup,” I’m not just gonna jump in at market. Nope!

I’ll wait for the pair to test resistance at 1.3550 and reversal candles before pulling the trigger. I will then aim for yesterday’s lows at 1.3425. As for my stop, I will leave it at the 1.3600 psychological handle.

On the fundamental side of things, I think it’s pretty clear to everyone that most market players are bearish on the euro.

For one, there is still a lot of political issues surrounding both Italy and Greece. Also, the debt contagion fears have not abated yet. In fact, just yesterday, Fitch warned that market that euro zone’s debt problems could spread to U.S. banks.

In terms of event risk, I foresee very little. There are bunch of mid-tier economic releases from the U.S. due like the report on building permits and the weekly jobless claims but I doubt they’d have a strong impact on EUR/USD’s price action.

To recap, here’s my plan:

Short EUR/USD at 1.3550, stop loss at 1.3600, profit target at 1.3425. As usual, I will risk 1% of my total account balance.

My profit target is ambitious so I may end up exiting early. I’ll be sure to update you guys though!

XOXO,

Huck

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14 comments

  1. danbld

    Morning. Yes, yes, someone who speak in my language. Is possible a larger pullback, but don t worry, will be fine. If u look at the sp500 chart after last night something big will happend. 

    Reply
  2. Salam FX

    we hv a limit order at tht level too..too bad, the stop was triggered, though upon further analysis, we noticed the volume was up few hours b4 it hits 3600 and bullish engulfing candles as well, which pointed to a better  limit at 3600..lessons learnt

    Reply
  3. Diptheria

    Great idea. Looks like we have a downward channel formed though. Might not make it back up past 1.3540 today. But still a great short opportunity. Thanks for the heads up!

    Reply

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