Pick of the Day: EUR/USD

About Pick of the Day

At the end of each trading day, I will find what I believe is the best looking short term trade setup for the upcoming trading day. If you're a forex newbie, it can be tricky in the beginning trying to figure out how to look at charts and draw lines. My goal is help you understand the psychology of price movements so you can learn to analyze your own charts and trade on your very own. Trades will be posted by 1 am ET, Monday through Thursday evening.

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October 2007

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Posted 00:10 30 October 2007 by Pipcrawler

Tonight, we have a nice, basic technical setup on EUR/USD. A weak USD sentiment is still in play ahead of the FOMC decision this week, but we may see a retracement as EUR/USD is current consolidating around 1.4400.

Stochastics are coming down from over bought territory which gives us another indication we may see a retracement.

No major fundamental events for the pair in the line up for today, so support and resistance should play out for the time being. If the pair does move lower, we will enter long at the 38% Fibonacci retracement area.

Long EUR/USD at 1.4345, stop at 1.4300, pt1 at 1.4390, pt2 at 1.4435

Remember to never risk more than 1% of your account on any single trade. Adjust position sizes accordingly.

Good luck and good trading!