Trade Idea: 2012-5-3 03:25
Isn’t that a beaut? Looking at the daily chart of EUR/USD, there’s a very clear falling trend line. It has been tested many times but price has been unable to break through. Price was pushed down every time, and for each instance, Stochastic showed that conditions were overbought. I suspect the same thing will happen again!
I know that no one is expecting a rate cut for today. However, with bond yields rising, concerns on economic growth, and political instability plaguing Europe, I won’t be surprised if ECB President Mario Draghi drops hints about cutting interest rates soon. Heck, he may even talk about how the central bank would soon need to launch another liquidity program to support the economy!
So based on my technical and fundamental analysis, I’m going to short the pair. I sold it at market with my stop just above the falling trend line. I’m hoping for at least 1.3000 and if it breaks that I’ll add to my position.
Lemme know what you think of my trade idea!