On the EUR/USD daily chart you can see the price has retraced back to the 38.2% fibonacci line where is is forming doji candlestick formations which hint at a possible continuation downwards. Price is still below the 200 EMA, therefore this looks like a good bearish setup.
Once we get strong bearish confirmation we will enter short with our stop loss set just above the 38.2% fibonacci line. The initial target will be the 0% line at 1.083, however, we believe it could target the support line below at 1.057. With the upcoming ECB meeting tomorrow, we are not going to set a take profit and not close any trade below a 2:1 risk to reward ratio. We will have a stop loss, like every trade.
However, a move upwards will initially target the 200 EMA. However, with the economic news in mind it is more likely to reach the declining resistance at 1.129.
Please bare in mind tomorrow is going to be a very volatile trading day for the Euro and we strongly recommend using the correct risk management at all times. If you do not feel comfortable entering into a trade then do not enter the trade.
see www.plusfxtrading.com for more analysis.
