Rally In The EUR/USD: Potential Late-Week Opportunity
Shain Vernier • 2 min read
It has been a quiet day across the forex majors, but the Euro showed some life a bit earlier on. Thus far, the EUR/USD has broken above yesterday’s high posting a 56 pip range. A test above the 1.1900 handle to an intraday high of 1.1911 did not last long, with price quickly retreating.
A strong group of economic metrics from the Eurozone during the overnight session created some interest among the limited traders involved in today’s market. The result was a spike and retreat of the Euro’s value against the USD for the early U.S. session.
It is a redundancy, but holiday trading is an arduous task. Nonetheless, there may be an opportunity just around the bend. Let’s take a look at the daily chart and break down a few technicals.
As of this writing, the EUR/USD is trading in the neighborhood of 1.1890. After early strength, it appears that 1.1900 will serve as topside resistance. In terms of other relevant support and resistance levels, price is in no man’s land.
Here are today’s key areas:
- Resistance(1): Psyche level, 1.1950
- Resistance(2): November high, 1.1960
- Support(1): 20 Day EMA, 1.1828
- Support(2): Bollinger MP, 1.1822
Bottom Line: Price has extended well above support and remains far below resistance. If bulls continue to push pricing higher during the coming hours, a short from 1.1949 may come into play. Due to the fact that these markets are exceptionally thin, profit targets must be modest and leverage in check.
For the remainder of the week I will be selling 1.1949 with an initial stop at 1.1966. Using a basic 1:1 R/R scenario, this trade produces a 17 pip return. While the prospect of this play going live during today’s session is unlikely, it may be elected later in the week.
In addition, if we see a considerable pullback from the 1.1900 level, a potential buy from support may be in the offing. Be sure to check the live market updates for trade recommendations should this market become active.