Forex Setup: EUR/USD’s Upside Breakout?

Spotted a setup I could trade after the NFP release! What do you think of this forex trade?

I’m still dollar bullish in the long-term, but I have a feeling that many dollar bulls are ready for some major profit-taking. After all, the dollar was one of the biggest (if not THE biggest) gainers of 2014. And with recent jobs-related reports surprising to the downside and the Greek government working hard at convincing everyone that their plans will stick, dollar bears just might have their opportunity to attack.

EUR/USD 1-Hour Forex Chart

EUR/USD 1-Hour Forex Chart

EUR/USD’s 1-hour chart is also supporting a possible uptrend. Aside from a rising trend line, the 100 and 200 SMAs have also crossed to the upside. Not only that, but Stochastic is also about to hit the oversold region.

I don’t plan on entering at market though. I’ll likely wait for a break above the 1.1500 major psychological area before I put on any orders. And, since I’m mostly dollar bullish, I’ll also watch the trade closely in case the euro bears come back with a vengeance.

I’m planning on risking 0.5% of my account above 1.1500, with a stop loss just below the psychological area. I’m aiming for at least the 1.1750 area, but I’m also willing to close early if the fundamental landscape once again favors the euro bulls.

How about you? Do you have any open positions or trade ideas on EUR/USD? What do you think of this setup?

XOXO,

Huck

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  • Tom

    I really hope you stuck to your 1.1500 entry level!

    • Yes I did! Phew! Now looking for an opportunity to short. It’s just fundamentally sound to buy the dollar against the euro right now. How about you? Do you have any EUR/USD trades?

  • Kent Onomatopoeia Cook

    I’m currently in a short trade at 1.1430, starting to scale in and looking for a break of the 1.1260 line before scaling further. I figure that between the G20 meetings, Fed’s Lacker speech, Eurogroup meetings, and the EU Economic Summit next week, the pair should see some good movement. In case of a surprise to the upside happens while I’m not looking, I’ve protected my entry by setting the stop to 1.1381

    • Congrats on your entry and locked in pips! I’m now looking at a possible short trade although my entries will probably depend more on the Eurogroup meetings.

      How long are you planning on holding your trades?

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