The Euro/Dollar Is Treading Water

EUR/USD (1.2522)

• Resistance Levels: 1.2602, 1.2705, 1.2885
• Support Levels: 1.2430, 1.2285, 1.2140

The EUR/USD is treading water around the key technical level at 1.25. We went below this level just recently, see the above daily MT 4 chart, and have been hanging on by a thread ever since. Investors are waiting on the ECB economic policy decision and statement later today.

We see near term support lining up at 1.2430. A daily close below this level will see sellers challenging 1.2285 and lower. Should we have a reversal, depends on what the ECB does and says, then we need a move back above 1.2605 to signal a bullish reversal. If this happens buyers will then target 1.2705. The former level is also at a trend line.

Let’s look at some trading strategy now. This could be an interesting day and here is how I have been playing this market. Recall, I entered a short position at 1.2709. I have since booked profits on half of my goal. I am going to keep the trade open to see if I can capture anymore bearish movement as I am not convinced the sellers are quite yet finished. To protect myself from losses I have entered a stop loss near 1.2705, resistance level. This is near my break even point.

Remember, Forex trading strategies are for educational purposes only and do not constitute trading advice.