Will you look at that?!? Sexy, ain’t it? EUR/USD, after touching the 61.8% Fibonacci retracement level, formed two dojis. Right after that, a bearish candlestick formed, telling me that the pair could be headed down. To add to my downside bias, there also seems to be a bearish divergence going on as price has been making “lower highs” while the Stochastic has been “higher highs.”
I believe that the fundamentals are also in my favor. Yesterday markets were once again reminded that the European debt crisis is still far from being over.
The euro gave up ground to most of its counterparts following rumors that the ECB would hold off purchasing bonds until the German Constitutional Court approves the ESM. On top of that, S&P also lowered its credit rating outlook for Greece from stable to negative.
Sure, the shared currency sometimes rallies when risk appetite is up. But looking at the bigger picture, both fundamentally and technically, I think that markets are still bearish on the euro. That’s just me though!
Because my technical and fundamental analysis has lined up, I’ve decided to sell at the market. I’m ultimately aiming for 1.2100, but I’ll be taking part of my position every now and then if the trade goes my way. As for my stop, I’ve placed it 100 pips away, just a couple of pips above the 61.8% Fib.
Sell at market (1.2380), PT 1 at 1.2200, PT 2 at 1.2100, SL at 1.2480. Risk disclosure.
There ya go! That’s my trade idea for today. What’s yours?
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