I decided to be a little more patient with this one, as I refrained from setting any short orders prior to the Holy Week holidays. Never know what could happen over the long weekend and I didn’t want to risk getting blown out by weekend gaps.
I did notice that price bumped the ceiling at the 1.4800 major psychological level then consolidated for a while. A downside break could confirm that the downtrend is still underway so I waited to short below the tight short-term range. As you can see from the chart below, I was able to get in at 1.4750 in today’s Asian trading session and I’m aiming for the bottom of the channel around 1.4600.
With a 100-pip stop outside the falling channel, I’m looking at a potential 1.5-to-1 return on risk for this setup. I’ll be extra mindful of the upcoming data releases, namely the Australian CPI and euro zone PMI reports, to see if I should exit early or start thinking about adding to my position. If you’re thinking of taking the same forex setup, make sure you read our risk disclosure!
What do you guys think of my trade idea? As always, I’d love to get your feedback so don’t be shy to share your thoughts in the comment box below.
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