Isn’t that a beaut? Looking at the daily chart of EUR/USD, there’s a very clear falling trend line. It has been tested many times but the price has been unable to breakthrough. Price was pushed down every time, and for each instance, Stochastic showed that conditions were overbought. I suspect the same thing will happen again!
I believe that the ECB Statement due later will prime euro bears to start charging.
I know that no one is expecting a rate cut for today. However, with bond yields rising, concerns about economic growth, and political instability plaguing Europe, I won’t be surprised if ECB President Mario Draghi drops hints about cutting interest rates soon. Heck, he may even talk about how the central bank would soon need to launch another liquidity program to support the economy!
If I’m right, I have a feeling that we’ll see the effects of Draghi’s potentially dovish remarks haunt the euro for some time.
So based on my technical and fundamental analysis, I’m going to short the pair. I sold it at market with my stop just above the falling trend line. I’m hoping for at least 1.3000 and if it breaks that I’ll add it to my position.
To recap:
Short at market (1.3157), initial profit target at 1.3000, stop loss at 1.3300. I will risk 1% of my account. (Risk disclosure.)
Lemme know what you think of my trade idea!
XOXO,
Huck
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