It’s been a while since I traded EUR/USD, hasn’t it? Since my long-term GBP/USD trade is still brewing, I decided to look at EUR/USD for a possible short-term trade.
And it looks like we have a winner! Yesterday EUR/USD found support at the 1.2700 handle after a strong downward move. The pair is headed towards the 1.2800 handle, which is right around a 61.8% Fib, previous support area, and 100 SMA on the 1-hour time frame.
The retracement setup is working for me because I haven’t changed my fundamental bias on the pair. The euro region is still popping up disappointing economic reports and Draghi is still adamant that we haven’t seen the last of the ECB’s stimulus arsenal. On the other side of the chart, the dollar is still as strong as ever, thanks to speculations that the Fed will raise its interest rates in early 2015.
I’m not too keen on entering at market, so I’ll probably be more patient and wait for an actual test of the Fib levels. If EUR/USD bears get their second wind earlier than expected and the pair doesn’t reach the 1.2800 area, then I’ll consider entering a short at new lows.
That’s it for me today! How about you? Looking at any pairs today?