Who’s in the mood to trade the euro? I hope you are, because these support and resistance plays on EUR/USD and EUR/GBP look too hot not to trade. Check them out and see for yourself!
I spy with my eye the euro bulls getting closer to their goal! About a week ago we talked about EUR/USD jumping from a channel support to possibly test its resistance for another time.
Guess what? EUR/USD is almost there! The pair is a few pips away from the 1.1150 minor psychological handle, which is right around the 100 and 200 SMAs. Not only that, but it’s also near the channel resistance on the daily time frame!
Before you sell the euro like there’s no tomorrow, though, you should know that the last few candlesticks are telling me that the bulls are on a roll. That means y’all gotta be careful in shorting this one! You might want to wait for an actual retest of the channel resistance or a bit of bearish momentum before you jump in.
Think EUR/USD is set to break its downtrend instead? Look out for a break above the 200 SMA and a possible retest of the 1.1400 – 1.1500 previous resistance zone.
Here’s one for those who aren’t feeling the dollar today!
Still not sold on a potential bounce? What if I tell you that there’s also a low key divergence forming on the chart?
Buying at the earliest signs of bullish momentum would give you a good reward-to-risk ratio especially if you aim for previous S&R levels like .8850 or the big .9000.
If you’d rather trade a downside breakout, though, then you could also wait for EUR/GBP to make new October lows, or break below its 2019 lows to confirm a potential freefall.
Whichever bias you choose to trade, make sure you’re practicing your risk management rules like your trading balance depends on it!