Forex Trade: Another Shot At Shorting EUR/USD!

Does this setup look familiar to you? Well, it should!

Just like in my setup last week, EUR/USD is once again near potential resistance levels at a 61.8% Fib and 100 and 200 SMAs on the 1-hour time frame.

EUR/USD 1-Hour Forex Chart

EUR/USD 1-Hour Forex Chart

As I mentioned in my trade review, I don’t think that the pair’s fundamental landscape has changed much since I first posted the setup. The euro is still plagued by geopolitical concerns and mixed economic data across the euro zone. Not only that, but Mario Draghi has made it clear that the ECB hasn’t ruled out the option of adding more economic stimulus. Heck, they had even hired a consultant for buying asset-backed securities! Meanwhile, the Fed is as cool as cucumber when it comes to sticking to its tapering schedule. The divergence is reason enough to short the pair on a longer time frame, don’t you think?

Now, I’m aware that I could avoided last week’s losses had I managed my position differently. So this time I’ll wait for price action to come to my entry areas. I’ll wait for the pair to reach the 1.3400 and wait for bearish signals and news before I manually pull the trigger. I’m thinking of risking 0.5% of my account and placing a 100-pip stop above the SMA.

What do you think of this plan?

XOXO and I hope you have a great weekend!

Huck

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  • Artur

    Its diverging on a daily, i’m waiting for better entry…

    • Hucklekiwi Pip

      Looks like it already broke below 1.3300. Are you thinking of jumping in on the downside breakout?

  • srchcool

    Unless you want to risk and scalp off 10-15 pips, this is not a good setup so far and if you pulled the trigger on that fake bounce you are in a DD. Fibo’s are questionable.. Look at HTF. 1H is no good for confirmation (too many fakes).

    • Hucklekiwi Pip

      Yep, I still haven’t pulled the trigger, as EUR/USD looks like it’s on a range right now. I’ll probably wait for another downward momentum and just look at other pairs in the meantime.

    • Hucklekiwi Pip

      Thanks for your two cents! Yeah, I held off from entering this one because it was too choppy. It would’ve been nice to have caught some of the downward momentum though!

  • Disparity

    I know this is ‘after the fact’ because it’s happened but there was a nice bullish pennant/flag thingy on the eur/usd.

    • Hucklekiwi Pip

      Are you talking about the 1H TF? It kinda looked like a double bottom too!

    • Hucklekiwi Pip

      Good spotting! Looks like it was soon for bulls and bears to decide on a direction at the time. Were you able to short EUR/USD when it made new lows? 🙂

  • Rohan

    I think the euro will touch 1.3500 to 1.3530 before going short

    • Artur

      agree

    • Hucklekiwi Pip

      Interesting. What fundamental catalysts do you think could push EUR/USD higher and what’s a reasonable time frame in expecting a move to 1.3500? Thanks! 🙂

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