EUR/USD Rebounds After Early Session Weakness
Shain Vernier • 1 min read
Counter-trend trades can be risky, no doubt about it. In a Live Market Update from yesterday, I issued a long trading plan for the EUR/USD. It performed dreadfully. Rates crashed through several daily support levels before posting a moderate rebound. That is one of the most difficult aspects of counter-trend trading — properly locating your stop loss.
All in all, it has been a solid forex session for the USD. Gains against the Euro, British pound, and Japanese yen have highlighted the day for the Greenback. Can the upward trajectory continue into next week?
With a lack of fundamental market drivers, it is unlikely. However, FED Chairman Jerome Powell is scheduled to speak on Tuesday. Perhaps his comments will backpedal a bit from the overtly hawkish FED perspective put forth last Wednesday. If so, we may be in for a retracement in several forex majors.
At press time, rates for the EUR/USD are well off of session lows and rotating near the 1.1600 level. Given the dramatic selling of the last 48 hours, a close above 1.1600 will be a moral victory for Euro bulls.
Late U.S. session levels:
- Resistance(1): Daily SMA, 1.1623
- Resistance(2): 62% Current Wave Retracement, 1.1636
- Resistance(3): Bollinger MP, 1.1642
Overview: In the event the EUR/USD settles above the Daily SMA, then a recovery from FED week damage will be well underway. A 50+ pip rally from intraday lows is a good sign and the momentum may carry over into the first trading session of October.
Hopefully, the last five sessions have stuffed your trading account with green pips. If not, October’s open is a mere 72 hours away. Opportunity will be afoot as the fall trading season hits full stride and the home stretch of 2018 approaches.