Dear Traders,

After a turbulent Wednesday, some of my prop trading colleagues made a killing and some managed to break-even. Thankfully, there were not big losers. Now, back to the point or our Daily Price Action report. After falling more than a 100 points, EUR/USD has formed a Daily bearish engulfing candlestick pattern. This pattern is indicating further bearish momentum in the sessions to come. After a big move, price tends to retrace to the mid-point of the previous day’s candle, and that is why our sell trigger is set at 1.2678 with a stop above 1.2780. Although I do not like to place fixed targets (since this is putting certain psychological constraints for letting winners run longer), I will make an exception this time. The first target short sellers should be aiming at is 1.2500. They should monitor how price reacts with these levels and judge whether to let their positions run or take profit.

Happy Trading,

Colibri Trader