Fibonacci Support In View For The EUR/USD

It has been a miserable week for the Greenback, more than likely a product of the recent chaos in the U.S. equities markets.

Written by: Dime Levov • Friday, February 16, 2018 • 2 min read

• Last updated: Friday, February 16, 2018

Fibonacci Support In View For The EUR/USD

It has been a miserable week for the Greenback. Market sentiment has been negative, more than likely a product of the recent chaos in the U.S. equities markets. Led by gold, the safe-havens have put a stranglehold on the dollar. Finally, it looks as though their grip is loosening.

On the heels of the U.S. construction data release, the USD is showing signs of life. The past four hours have given bulls some hope, featuring gains across the majors. As a result, the EUR/USD has re-entered a favorite technical area.

EUR/USD Technicals

Active trading is a challenge. It tests our discipline, patience, and temperament. In the U.S. Overnight Preview from Wednesday, I outlined a short position trade in the EUR/USD. The recommendation developed as expected except for one little thing — the stop loss was hit before an immediate reversal.

Since being stopped out at 1.2551, price has come off over 100 pips. After posting a session high of 1.2554, the bears have taken complete control. Trades like these are difficult to handle, as they test both discipline and patience. In my experience, the best thing to do is recap, journal, and move on to the next setup.

Here are the key levels for the EUR/USD today:

Resistance(1): Double Top Area, 1.2537 to 1.2554
Support(1): 38% Retracement, 1.2421
Support(2): Psyche Level, 1.2400

Bottom Line: A long position from 1.2424 with an initial stop at 1.2394 is a positive entry to the bull. On rotation back into the center of the 1.2400-1.2500 value area, this trade yields 30 pips on a 1:1 R/R management plan.

Losing trades are no fun. Moreover, sometimes the way a loss is taken can really twist the knife. Nonetheless, losses are an unavoidable part of the job. They serve as an important reminder that risk management is the name of the game.