Buying the Retrace in EUR/USD at the 100 SMA
EUR/USD has retraced 100 pips lower today, but we went long as MAs are holding as support once again
The EUR/USD was bullish throughout 2020, as the USD turned massively bearish with all the political unrest in the US. As a result, all major currencies have been advancing against the USD for nearly a year now, and the EUR/USD has climbed around 15 cents during this time.
In October, we saw a slight pullback, after the EUR/USD failed to break the major resistance level at 1.20. But the decline ended with the US elections at the beginning of November, and the bullish trend resumed again. The big level at 1.20 was finally broken, and buyers pushed this pair to 1.2350s.
Over the last two months, moving averages have been doing a great job as support on the H4 chart during pullbacks lower, particularly the 50 SMA (yellow) and the 100 SMA (green). Today we saw another retrace lower, sending the EUR/USD around 100 pips down, but it seems like these two moving averages are working as support again.
They held the decline at 1.2250, and now the price is starting to bounce off these MAs. We decided to open a buy forex signal above the MAs, in the hope that the bullish trend will resume again soon. So, we are long on this pair now, with a stop loss below the 50 SMA.
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