Daily Outlook 04.02.2008 by Dimo Dimov
The euro rose initially sharply on Friday to 1.4954 but was sold off heavy thereafter to 1.4785. This looks like a reversal pattern so in my opinion the short term direction is down. We are currently in a corrective recovery after Fridayâ€™s losses and further recovery to 1.4855 is likely. However if the direction is down, the recovery should stay below 1.4900. On the other side a rise above 1.4900 will abort the impulsive interpretation of the Fridayâ€™s sell-off and will increase the possibility for a re-test of 1.4954.
Trading strategy: 09:27 EST; 14:27 GMT
Short position from 1.4851
Exit the short position at market (1.4817) with profit 34 pips.
Sell again on recovery to 1.4855, stop loss - 1.4900, target - open
Confidence level â€“ medium
This analysis has only informational and educational purpose and does not represent a proposal for buying or selling currency contracts.