Trade Idea: 2013-1-25 02:10
As you can see, EUR/USD seems to be trading in a relatively tight range. It has found resistance at the 1.3400 level and support at 1.3270. If this kind of price action keeps up, I think I’ll have a relatively safe long setup soon.
What exactly am I talking about?
Well, if price continues to fall, we could see 1.3270 be tested again. This, I believe, is a pretty strong level and the bulls will most likely do their best to keep it intact. If reversal candlestick patterns form at that area, I’ll jump in long.
I have a feeling that we’ll see the pair move when the German Ifo is released. The consensus is for the report for show that the economic outlook in the region’s largest economy improved in January.
However, I don’t think that it will be enough to spark a breakout on the pair. Should it come better than expected, we’ll probably see EUR/USD just test 1.3400. But if it doesn’t, price could trade lower and trigger my trade.
Buy at 1.3270. Stop loss at 1.3230. Profit target at the top of the range at 1.3400. Risk disclosure.
This is just my two cents though. What do you think?