Partner Center Find a Broker

Trade Idea: 2012-6-7 1:26

I’m hoping to extend my winning streak by going long on EUR/USD. Are you with me? Here’s my trade idea:

EUR/USD 1-Hour Chart

On the technical side of things, the pair has been making higher highs and higher lows on the hourly timeframe. I think that this trend could carry on for at least a couple of days, so I’m going to buy the pair when it pulls back.

Using the Fibonacci retracement tool, I spotted that the 1.2500 coincides nicely with the 61.8% Fib level. I plan to enter at that level when reversal candlesticks materialize and confirm my bullish bias.

Meanwhile, on the fundamental side of things, I think the market is starting to price in the possibility of QE3 due to the weakening macroeconomic situation of the U.S.

If you recall, the non-farm payrolls last Friday came in severely weak. It showed that the unemployment rate surged higher to 8.2%. The number of new jobs was also only at 69,000, and not 151,000 like initially expected. It also helped that euro zone fears have somewhat tempered, thanks to the emergency conference call of the G-7 nations two days ago.

There are a couple of important events on the docket today. There’s the bond auction of Spain, as well as a scheduled speech by Federal Reserve Chairman Ben Bernanke. I don’t know how those events will turn out, but I hope they end up helping my trade!

If I do decide to enter, I’ll place my stop loss just below the most recent swing low at 1.2430. Once price hits the level, my trade idea will already be invalidated. I’ll put in two positions, risking 0.5% of my account on each one. I will take profit at 1.2600 on my first position then I’ll let the other half ride the trend.

To recap, my plan is:

Buy EUR/USD at 1.2500, stop loss at 1.2430, first profit target at 1.2600, second profit target yet to be determined, 1% risk. Risk disclosure.

XOXO,

Huck

Follow me on MeetPips.com
Follow me on Twitter
Like my page on Facebook

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.