On Friday I mentioned how the EURUSD was at risk of closing the week below the key 1.0635 handle. This area has served as the closing price of several weeks lately. It’s also the 38.2% Fibonacci retracement for the current 2017 range as well as the current range for February.
For a more comprehensive list of factors, see the most recent weekly forecast.
At the start of the new week, the single currency reached a session high of 1.0632, just three pips below resistance. As always, I viewed this as an area of value rather than an exact level.
As such, I had a pending order to go short at 1.0630, which was just barely triggered within the first few hours of trade. I don’t usually look to enter within the first 24 hours of a new week. However, I was going to be away from the computer on Monday and didn’t want to miss the opportunity.
From here I’ll be interested in adding to my short position on a daily close below last week’s low at 1.0520. This area has influenced price action since late November of last year and is also near the 2016 close.
If sellers can manage a daily close below 1.0520, I will target the multi-year lows at 1.0370. That would make the initial position worth 5R (10% profit if risking 2%). The parameters of the second position, if there is to be one, will depend on how things look if and when we get a break of 1.0520.
Ideally, I’d like to see 1.0588 hold as resistance on a 4-hour closing basis. This area has been a factor on the intraday charts since November of last year. My stop has been trailed in the event the pair finds a meaningful bid at current levels.
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