EUR/USD Tests Daily Double Bottom

It has been a tough week for EUR/USD bulls. Rates have put in a two-session loss of more than 50 pips and a stiff test of a key area of daily support. A lagging group of German metrics from the U.S. overnight session certainly didn’t help the Euro’s cause, bringing more bearish sentiment to the table.

IFO Reports Send The EUR/USD Tumbling

As mentioned earlier, the IFO Business Climate, Current Assessment and Expectations for April were released during the European forex session. Each figure fell from the previous release and disappointed expectations. Subsequently, the EUR/USD put in a hard test of a key Double Bottom pattern on the daily time frame.

Here is the technical zone to watch in this market for the remainder of the trading day:

• Support(1): Double Bottom, 1.1183 – 1.1176

Bottom Line: Earlier, price put in a hard test of this area before rallying above the 1.1200 handle. In the event we see another run at the Double Bottom, a long scalp may come into play.

For the rest of the day, buys from 1.1178 with an initial stop at 1.1168 offer an ideal scalping entry. With a modest profit target of 12 pips, this trading plan is an affordable way to fade the prevailing bearish trend.