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Possible Pullback Buy For The EUR/USD

In a Tuesday update, I outlined a trading plan for going long from a Fibonacci retracement level in the EUR/USD. Today’s early strength from the USD has brought the possible execution of this trading plan into view. Currently, the EUR/USD is trading in the vicinity of 1.2005. If sellers step in and drive this market south of 1.2000, an opportunity to go long may be in the offing.

EUR/USD Outlook

The ISM Manufacturing PMI for December data release has hit the newswires. The number has outperformed expectations, coming in at 59.7 above the projected 58.1. Perceived strength in U.S. manufacturing has sparked a bit of optimism toward the greenback. The result has been a retracement of yesterday’s bull run in the EUR/USD.

EUR/USD, Daily Chart

For now, price is firmly inside of Tuesday’s range. It is obvious that the key psyche level of 1.2000 is a key number on the minds of many market participants.

Here are a few levels to be aware of for today’s session:

  • Resistance(1):  Round number, 1.2075
  • Resistance(2): 2017’s high, 1.2091
  • Support(1): Psyche level, 1.2000
  • Support(2): 38% retracement of current bull run, 1.1980

Bottom Line: This market is showing signs of prolonged rotation between macro support and resistance levels. As we move forward, 2017’s high will loom large and likely attract a firm test. A long entry from 1.1985 according to yesterday’s Fibonacci trading plan will give us a good chance of racking 30 pips on the prevailing bullish sentiment.

As always, trade smart and for tomorrow!

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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.
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