Shorted EUR/USD at market early this week. Let me know what you think of this forex setup!
As I mentioned in my tweet early this week, I shorted EUR/USD at market (1.2479) when I thought that the pair is on its way to making new intraweek lows.
On a fundamental basis, I’m still bullish on the dollar on the grounds of possible rate hikes next year. It also doesn’t hurt that the U.S. has generally been printing better-than-expected economic reports recently. I can’t say the same about the euro zone though, as the region is still printing disappointing figures in its PMI and inflation reports.
On the technical side, I saw an entry opportunity when EUR/USD made a shallow retracement around the 38.2 Fib area on the 1-hour chart. Since the pair only went that far in its last “retracement,” I thought it was safe to enter at market and place my stop loss just above the Fib levels 100 pips above my entry.
Thank goodness for wide stops! EUR/USD unexpectedly spiked on Tuesday when a news report hinted that ECB leaders are questioning Draghi’s leadership. The possibility of Super Mario getting replaced by someone less open to QE turned out to be bullish for the euro, and pushed EUR/USD to just 1 PIP below my stop loss. Phew!
Right now the pair is still hanging around its previous lows. Do you think the bears are done at the level, or are we just seeing a pause in the euro’s selloff?
Your two cents are welcome!