Trade Setup: Simple Support Play on EUR/USD

With the U.S. markets on holiday and not a lot of reports popping up, I’m looking for a bit of bounce for EUR/USD. Here’s my forex setup!

As you can see on the chart, EUR/USD is having trouble breaking below the 1.0900 major psychological handle, (MaPs), which is right around last week’s lows. In fact, if you zoom out to the daily chart, you’ll also see that the 1.0900 MaPs has been a pretty legit area of interest since last year. This time around an oversold stochastic signal is also attracting short-term bulls like me.

EUR/USD: 4-hour Forex Chart

EUR/USD: 4-hour Forex Chart

The technical setup above is why I risked 0.25% of my account on a long trade at market prices. I’ve placed my stop loss a half weekly ATR away at 1.0760, and I’m planning to take profits somewhere around the 200 SMA and falling trend line resistance (1.1060).

Being a long-term dollar bull, I’m only planning to hold on to this trade for a couple of days, if not trading sessions. Right now, I believe that the dollar’s strong performance is due for a bit of profit-taking, while risk appetite is likely to extend to the higher-yielding currencies.

Here’s my setup:

Risk 0.25% at market (1.0912), place stops 150 pips away (1.0760), and initially take profits at this week’s open price (1.1060).

What do you think? Will we see the euro bounce higher today? Or will the bears break the support level and extend the pair’s downtrend?

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Here’s my Q3 2016 Trade Review and Reflections
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