The EURUSD has reached our short-term target in the 1.0520 region, giving those who sold the pair near 1.0715 a profit of at least 180 pips. I was also in this trade and exited ahead of today’s U.S. session for a 3R profit.
The single currency has rebounded quite aggressively following a print of 1.0520. The bounce isn’t surprising given that it’s near the 2016 closing price along with two swing lows from November and December.
So where to from here?
It’s still early yet, but a sell signal on a retest of last week’s close at 1.0635 would catch my attention. A close above that and I’ll look for a move back to the 1.0715 handle, which is now the 61.8% Fibonacci retracement from February 2nd to the 15th.
There is also a chance that the price action since mid-November has carved out an inverse head and shoulders. But it’s far too early to call it as such. For that to happen, buyers would need to traverse several key levels including the trend line that extends from the 2016 high.
If we get a sell signal higher up, I’ll be interested in adding to any short position on a daily close below the 1.0515 area. But first, I’d like to see a reversion to the mean combined with a proper sell signal at resistance.
In the absence of those two things, I’ll continue to stand aside.
Want to see how we are trading this setup? Click here to get lifetime access.