How to trade EUR/USD?
Kira Iukhtenko, FBS
“Rain can’t last forever”: this week we’re observing the long-awaited bullish correction in EUR/USD. Last week the price bounced from a fresh 2-year low of 1.2350.
Bulls managed to push higher as this week’s economic calendar was very light: the market was driven mostly by technicals. However, it is now becoming rather clear that the buyers lack real fuel to break above the 1.2500 hurdle. From the technical point, the market has room for a corrective growth towards 1.2650/1.2700, but this scenario would be activated only above 1.2500.
Anyway, the medium-term picture remains bearish. Euro could return to the descending trend already on Friday: euro zone will release Q3 GDP and inflation data, while United States – retail figures and consumer sentiment index.
Conclusion: these days selling EUR/USD on rallies remains the most adequate strategy. I’d recommend selling from 1.2490 after another failure to overcome the 1.2500 figure. You could also sell on a break below 1.2400. Sell orders are clustered at 1.2350/40 and 1.2250/40.
Chart. Daily EUR/USD