EUR/USD: We May Have A Premium Trade Location To The Short

Posted Monday, October 16, 2017 by
Shain Vernier • 2 min read

The USD has posted a decent rally against the Euro over the past three sessions. Yesterday’s comments towards a December rate hike from Janet Yellen at the Group of 30 Summit certainly did not hurt the confidence of USD bulls.

With no real economic news on the docket for the rest of the U.S. session, we may have a chance to grab a nice EUR/USD short.


EUR/USD Technical Outlook

Last Friday’s CPI release came in under expectations, leaving a surprising weakness in the EUR/USD. It is the EU’s turn tomorrow, with the Eurostat release of the Eurozone CPI. This number is likely to shake things up considerably, so be sure to check in with my colleagues Rowan, Arslan, and Skerdian for the latest going into the report.

In the meantime, the EUR/USD daily chart gives us a premium trade entry to the short.

EUR/USD DailyEUR/USD, Daily Chart


Today’s trade opened definitively bearish but since has shown a recovery. Here are the key levels:

  • Robust topside resistance is present from the 20 Day EMA of 1.1814 to the Bollinger Midpoint of 1.1819.

  • The Daily SMA at 1.1848 serves as extended resistance.

  • The 38% retracement level at 1.1830 has seen heavy two-way action. This is important in this level is a key for participation, not necessarily a valid resistance point.

Bottom Line: Premium trade locations are often elusive, but a sell of 1.1840-1.1848 gives a fantastic position short entry. A stop above Friday’s high of 1.1874 brings a nice 1:1 R/R scenario into play for the rest of the U.S. and overnight session.

Tomorrow’s Eurostat CPI is likely to shake this market up. In the event that the short trade is firmly in the green before the number is released, it may be a good idea to take some profit off of the table.

As always, trade smart and for tomorrow!

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