Good Shorting Location Coming Up For The EUR/USD

The EUR/USD has been extremely active over the past three sessions, creating opportune market conditions for short-term traders. Kudos to a

Written by: Shain Vernier • Monday, October 30, 2017 • 1 min read

• Last updated: Monday, October 30, 2017

The EUR/USD has been extremely active over the past three sessions, creating opportune market conditions for short-term traders. Kudos to all who got in on the earlier sell signal for this pair. It closed out a winner, hitting the take profit.

Currently, we are seeing a moderate retracement in pricing, trading in the 1.1625-35 area. Price action is firmly inside of Friday’s range, bringing a key Fibonacci resistance level into play.

EUR/USD Technical Outlook

The greenback has made a considerable move against the Euro over the past few weeks. Last Thursday’s ECB announcements added fuel to the fire, prompting a large sell-off.

EUR/USD, Daily Chart

Moving forward, here are a few observations facing this market:

Wednesday’s FOMC announcements are going to dictate the direction of the USD. Although a rate hike is unlikely, I expect hawkish verbiage out of FED Chair Yellen.
Last Thursday’s sell-off prompted a crossover of the Bollinger MP and Daily SMA. This is a signal of changing market sentiment.
The macro Fibonacci retracement level at 1.1422 is crucial as we move into the fourth quarter of 2017.

Bottom line: Like many traders, I have a bearish bias towards the EUR/USD. But, that can change at a moment’s notice. For now, shorts from the 38% retracement of the current bearish run at 1.1674 is good trade location. A 1:1 R/R with an initial stop above 1.1705 produces over a 30 pip return on the trade.

In trading, timing is everything. I am optimistic the short entry will go either later today or during the overnight. In the event that it is not closed out by Wednesday, check back for a trade management update ahead of the FED announcements.

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ABOUT THE AUTHOR See More

Shain Vernier

US Analyst

Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.