Daily Analysis: Short term sell opportunity in the EURUSD

Today we have an interesting short term sell opportunity for the EURUSD. In the medium term, I think the pair might continue to trade higher. We will be looking to buy valleys later during the week, as mentioned in the weekly outlook. However, in the short term, I believe that the pair might retrace some of the recent gains, and trade lower. Remember, this is not an aggressive entry, and we are only looking for around 30-50 pips from this trade setup.

Looking at the hourly chart of EURUSD, there is an up-move trend, which is holding the downside in the pair as of now. There is also a support at around the 1.3690 level, as can be seen in the chart below. If the pair manages to trade lower, breaks the trend line and support, and close below it, then we can enter into a sell trade. Remember, we are not planning to sell rallies in the pair. However, if the pair moves higher from the current levels, then our trend line and support combination will also move higher.

Initial target should be around the 1.3650 level, and final target could be around the next up-move trend line, as plotted on the 4 hour chart shown below. Stop should be placed above the last high created.

Reviewing yesterday’s events and trades
Yesterday was a bit boring day, as the market was quiet due to the holiday in the US. No major movement was noted, and most of the major pairs consolidated in a range throughout the day, except for the GBPUSD, which traded a bit lower yesterday. There were two main events lined up, including the RBA monetary policy meeting minutes and BOJ press conference. There was no major change in tone from both the central banks. After the release, both AUDUSD and USDJPY traded higher. The Australian dollar was also seen gaining momentum against the New Zealand dollar and the Euro. The Japanese Yen, on the other hand lost a lot of ground against most of the major currencies in the Asian session.

Fundamental Outlook for the day
Today, there are a lot of fundamental events scheduled both in the European and the NY session. Earlier in the European session, the Euro zone’s current account data, the UK’s inflation data and German ZEW economic sentiment data were released. The outcome was mixed, as both EURUSD and GBPUSD are trading a touch lower after the release. Later in the NY session, the US National Association of Home Builders (NAHB) Housing Market Index, Net purchases of U.S treasury bonds, TIC Net Long-Term Transactions data and NY empire state manufacturing index will be released. It would be interesting to see whether the US dollar can manage to recover some losses after the data release.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: GBPUSD, EURAUD, AUDUSD, NZDUSD, AUDNZD, USDCAD and EURGBP.
Get it HERE: Vladimir’s Markets Forecast

I wish everyone a good green week. Happy trading friends!

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