Trading Strategy For this Week (23rd June 2019)
EURUSD price moved up sharply last week and broke out of the upper trend line of the channel and also resistance levels formed over past two months.
Dovish Fed adding to the US Dollar weakness has fueled the EURUSD short squeeze which now sits well above the channel’s upper trend line and earlier resistances which will now provide support.
While it is nearly impossible to predict which way price will move, trading is all about setting well defined risk and rewards based on technical levels. When the risk is lower than the reward, you are certain to make profits even when 50% of the trade setups work in your favor.
Always wait for a confirmatory H1 bar before entering trades at support/resistances – This is one way you can protect against strong moves against your trading position. While it is tempting and sometimes possible to catch the price at the highest or lowest swing points, in long term, it does not work.
Recommendation for this week:
Short EURUSD @ 1.1430 (after a H1 reversal bar) with SL above 1.1480 for Targets 1.1360 and 1.320.
Trading Strategy For Previous Week (16th June 2019)
EURUSD has been trading inside a well defined channel with upper trend line proving excellent resistance in the range of 1.1310 to 1.1350 and a clear solid support emerging just above the lower trend line at 1.1115.
With weakness in US dollar, this week may present yet another test of the upper trend line resistance which could be used for entering short positions. Any short positions will need to closed on signs of reversals from 1.1200 levels since any further USD weakness could potentially result in breakout.
Long trades can be initiated on signs of reversals from 1.1150 or lower levels with targets of +100 pips.
Traders can set stoploss above/below the strong resistance/support levels formed so that risk is clearly defined.