Now Waiting on a Short Euro Trade

EUR/USD (1.1062)

Points to consider in this euro Forex market:

• The euro has broken below a rising trend line in play for seven months.
• Waiting on improved technical analysis, reward to risk, before activating a short EUR sale.
• Trade strategy: pending short EUR sale at 1.1111

The EUR/USD Forex market has broken lower after the Brexit referendum which saw the United Kingdom electing to divorce from the European Union. The euro has broken back below a rising trend line in play for 7 month (December 2015), indicating the overall downtrend in this Forex market is back in play. Please refer to the below daily MT 4 chart for today’s daily technical analysis.

Euro Technical Analysis

 Let’s discuss today’s daily EUR/USD technical analysis. Then we can talk trade strategy as this market has become very exciting to follow. There is near term support lining up at 1.1017. A daily close below this first downside barrier challenges the next technical support that lines up at 1.0875. The alternative euro analysis, should this market push back higher notes the former support level, and trend line as the first upside barrier. This level lines up at 1.1160. A break above this first upside barrier, challenges the next technical resistance level at 1.1392.

Trade Strategy

Let’s talk today’s EUR/USD daily trade strategy. Entering a short EUR sale is very compelling. However, from a risk to reward perspective, price action is too close to a technical support level making this move a bit premature. So, here is the plan. I will enter a short EUR sale to go active with a daily close above 1.1111. Should this short sale go active, my first target is 1.1017. The initial stop loss will go active with a daily close back above 1.1160.