EUR/USD is currently in correction mode with a solid bullish sentiment. That's why you can look forward to buying on dips opportunities in the demand zone.

Hi fellow traders! After successfully posting gains on Friday (2/December), EUR/USD is showing a corrective movement. Since the market sentiment is still dominated by the Fed's dovish statements which pressure the Dollar, you may wait for opportunities to buy on dips when the correction reaches the demand zone.

eurusd

 

Analysis and Recommendation

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

eurusd 2

Based on the H4 chart above, it has been pointed out that EUR/USD rally is stalling. The current correction is trying to reach the demand zone 1.0438 – 1.0372, which has the potential to become a key entry point for a buy-on-dips scenario. It is estimated that the Euro will continue its parade to the supply zone 1.0566 – 1.0620 on condition that bullish signals are confirmed.

Be aware if the EUR/USD correction continues to penetrate the 1.0372 level since the price is at risk of continuing to wear out if this level is successfully passed. The next EUR/USD correction target is in the demand zone 1.0271 – 1.0197 or even lower.

  • Therefore, set a long position at 1.0438 when the price manages to enter the demand zone and there is a bullish signal confirming it. Stop loss may be positioned at 1.0372, while the profit target is at 1.0566.
  • Alternatively, set a short position at 1.0372 when a significant breakout signal confirms it. Stop loss may be positioned at 1.0438, while the profit target on 1.0271.

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: 1.0620, 1.0566
  • Support: 1.0438, 1.0372, 1.0271, 1. 0197