About Pick of the Day

Each day, I will try to find what I believe is the best looking short term trade setup for the upcoming trading day or week. 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. I will post my ideas and/or reviews through out each session right here, on Twitter and on Facebook.

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December 2007

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Pick of the Day: EUR/USD

Posted 22:23 13 December 2007 | Comments

Good Evening! For the last "Pick" of the week will take a look at EUR/USD for a possible resistance play on the horizon.

On the chart, I used the Fibonnaci retracement tool and we can see the 50% Fib retracement level lines up with minor resistance around 1.4660. This pair has been in ranging mode for a while now, and I feel if it rallies back higher we may see a test of that area before a bounce back lower. Our max profit target is a support area previously tested in the beginning of December.

Before going into the trade idea, let's remember we have US CPI tomorrow. This may give us enough volatility to push the pair up to our sell area. Stronger inflation for consumers is expected, especially after the upside surprise to PPI today. We may see the Greenback further rally later today.

For now, we will jump in short at a better price:

Short EUR/USD at 1.4660, stop at 1.4710, pt1 at 1.4610, pt2 at 1.4530

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

Stay tuned for updates and trade adjustments. Good luck and good trading!