Daily Price Action Setup EUR/USD
Dear Daily Price Action Setup Traders,
Last week’s daily price action setup trades gave satisfactory results. One of the pairs did not perform as expected and was stopped out (GBP/NZD). While two others- GBP/USD and GBP/CAD gave very good results- especially GBP/CAD.
This week, I am looking at the most traded currency pair in the world– EUR/USD. It is showing some signs of a reversal. My personal belief is that trading against the trend is as safe as trying to catch a falling knife. From a daily price action setup point of view, this pair looks ready to make a minor correction or a major reversal.
Looking at the daily price action picture, I can clearly see some a few signs of exhaustion of the downtrend. First of all, this pair has traded near the 1.2300 support level for quite a long time- more than a month. Secondly, I see a few rejections of the 1.2200 level and a couple of daily rejections of the 1.2300 level. Lastly, the daily price action setup that we have from Friday is a bullish engulfing pattern. This gives further confirmation that buyers are willing the test the next resistance level. That is why, depending on the Sunday open, I would like to go long on this pair.
The entry parameters I would be looking for are:
Entry at 1.2425 with a stop just under 1.2320 and a first target- the level of 1.2550. Depending on how the price reacts to this level, I will decide whether to let the position run to my next target at 1.2900 or take profits.