EUR/USD: Fibonacci Resistance Coming Up
Shain Vernier • 1 min read
After an extremely tight Wednesday, the EUR/USD has broken out to the bull. Thus far in the forex session, the EUR has gained over 40 pips against the USD. Price action is currently positive on the intraday timeframes for the U.S. session.
In the event that bulls continue to dominate today’s action, an area of resistance will come into play. An important Fibonacci retracement level, moving average, and midpoint will likely pose a formidable challenge to the upside momentum.
On the daily timeframe, the “L” formation is still intact. Prolonged rotation between the current wave’s 38% retracement and the round number of 1.1550 have dictated trade for the past several weeks.
EUR/USD, Daily Chart
Here are the important topside resistance levels:
Resistance(1): 38% current bear run, 1.1661
Resistance(2): 20 Day EMA, 1.1679
Resistance(3): Bollinger MP, 1.1695
As I write this, price is extending the daily range further, trading near 1.1655. Here is the trading plan moving forward for the remainder of the U.S. session and into Friday’s forex hours:
A 1:1 R/R short from the convergence of the 38% retracement and the 20 Day EMA at 1.1674 is ideal. The initial stop should be placed above the Bollinger MP at 1.1701.
If elected, this trade will produce over 25 pips.
Price action to the bull is strong at the moment. Short entry from converging resistance levels will give us a shot to capitalize upon any retracement of today’s breakout.
Be sure to check back for tips on how to maximise profitability while limiting risk. As always, trade smart and for tomorrow!