Welcome to my new series where I will be sharing a few new setups every week.
Today we will be looking at EURUSD.
This pair has been moving in a bearish market with price recently rejecting a recent bullish movement.
Anticipating the pair to retest the 1.17200-1.17000 area. If it breaks through then aim for it to hit tp1 and tp2.
If the weekly candle closes above 1.18650 then I would look to exit the trade as it would invalidate the bearish movement.
Analysis on the trade can be seen in the video embedded below.
Summary of the video:
- Lower-lows and lower highs
- Descending channel
- Bearish movement
- Previous test of the neckline of the head and shoulders pattern.
An analyst at Scotiobank explained the vulnerability of the Euro:
“A descending trend channel has formed in the period since early September, and EUR has weakened for two consecutive months. Interest rate differentials are a headwind, and speculative bullish EUR positioning is extended. Sentiment in the options market is neutral across shorter time horizons and modestly bearish beyond six months. We maintain a relatively neutral EUR forecast with a year-end 2017 target of 1.18”
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