After catching pips from last week’s USD/JPY trade, I decided to turn my focus on EUR/USD. What do you think of this forex setup?
As you can see from the chart above, EUR/USD found a lot of support from the bulls this week. In fact, the pair is showing a weekly gain of 200 pips (1.88%) as of writing.
Thing is, I’m still a dollar bull overall. While I believe that this week’s set of disappointing data and a dovish comment by Fed’s Lockhart are enough to encourage profit-taking and a bit of dollar weakness, I’m still more comfortable buying the dollar against the euro. After all, the Fed is still set to raise its rates some time this year while the ECB is on track to pumping more money in the markets. Not only that, but the threat of a Greek default is still looming over the forex scene.
This is why instead of buying EUR/USD (which I’m not comfortable with), I decided to wait for a good level to sell the pair. I am eyeing the 1.1025 area, which had been a good resistance level throughout March. I’m planning on risking 0.5% of my account and placing a tight stop loss depending on whether or not there’s a major event on tap.
Do you think the pair will reach the resistance level? Or is it too soon to look at long USD trades? What do you think? Any thoughts would be welcome! 🙂