Daily Outlook: Looming over the Euro we have the credit downgrades of Greece, Spain and Portugal from earlier this week (which drove the price down over 200 pips). On top of that Moody's yesterday said that unless Greek aid became less fragmented - referring to Germany's reluctance to publicly and vocally commit - more downgrades would be coming. Such downgrades would undoubtedly push down the EUR/USD.
Reflecting that on the charts the pair is currently caught within two bearish channels - one visible easily on the 1h and 4h charts (orange lines on chart below) and the other is visible on the daily charts and higher (blue lines below). Given this combination of fundamentals and technicals I will continue to look for opportunities to sell.
I have a hunch that smart money will look to shed risk going into the weekend, meaning EURUSD losses, to limit exposure to any bad Euro news over the weekend.
Trading Idea: It is Friday and, as usual, I most likely will not open any new positions today. I do still have my short from 1.3265 open targeting 1.3175 now. If I was looking to reset or add to my short position my primary trade would be to short in the resistance zone of 1.3275-1.3300 (around the falling orange resistance line on chart below) with targets at 1.3255, 1.3225, 1.3200 and 1.3175 (for 100-125 pips profit).
Happy pipping all and check your email this weekend for a new function I'm rolling out called trading groups! As always, never trade more than you can afford to lose and always be smart. If I had to give one word of advice to beginning traders it would be to trade less, less less. You don't need to be in the market all the time and nor should you be - be selective, be patient and take good setups with good risk/rewards only.
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