Euro is seen in a corrective mode from its bullish track. Therefore, you may look forward to opening short as the main trading scenario this time.

Hi all fellow traders! EUR/USD seems to have corrected again and wearing out on Wednesday (8/February). Euro was seen to be corrected from its bullish track because no catalyst could move the market. Even so, Euro is trying to rise to test the supply zone. Since there is no apparent bias yet, testing the supply zone has the potential to drag the Euro back to a consolidative track.

eurusd

 

Analysis and Recommendation

Let's take a look at the following EUR/USD H4 chart below: 

eurusd

Based on the H1 chart above, it has been pointed out that EUR/USD is rising to test the supply zone of 1.0815 – 1.0780. The sell-on-rally scenario will be a trading option this time if there is a rejection or bearish signal in the supply zone with a target around the demand zone of 1.0695.

Be aware if there are no bearish signals in the supply zone of 1.0815 – 1.0780 since Euro will advance to continue the rally and target the higher supply zone around 1.0881. That way, an alternative to a long scenario can be prepared when there is a breakout. 

Here are two trading scenarios that can be prepared:

  • Therefore, set a short position at 1.0780 when the price manages to enter the supply zone and a bearish signal confirms it. Stop loss may be positioned at 1.0815, while the profit target is at 1.0695.
  • Alternatively, set a long position at 1.0815 when a significant breakout signal confirms it. Stop loss may be positioned at 1.0780, while the profit target on 1.0881.

Keep in mind to always use risk and money management before trading! In addition, to make use of trailing stops, don't forget to exit the market as soon as you find a reversal signal!

EUR/USD key levels

  • Resistance: 1.0940, 1.0881, 1.0815, 1.0780
  • Support: 1.0695, 1.0645