Anticipating a retest of this year’s peak for EURUSD
Polls are closing in the Italian election as the Asian trading day begins, but the results won’t come out until early afternoon Monday Italian time. So EURUSD will probably trade quietly in the meantime. The SPD (Social Democratic Party) vote in favour of forming a grand coalition with Angela Merkel's conservatives in Germany was expected and has had little impact on opening prices.
The trade-weighted EUR had declined since the ECB’s January meeting so there are unlikely to be any concerns expressed in the post-meeting statement. Instead expect a repeat of the “patience, prudence and persistence” mantra.
Management and risk description
The euro still displays a developing impulsive (bullish) Elliott Wave sequence from last November’s 1.1555 corrective low; see daily chart below.
In the short term, resistance lies at 1.2360 and 1.2390/1.2415 with any reaction finding support at 1.2270/1.2230, for the next advance to retest this year’s 1.2555 January peak.
Daily EURUSD chart (click to expand)
Source: ThomsonReuters. Create your own charts with SaxoTrader; click here to learn more.
Entry: Will try to buy EURUSD around the mid 1.2200s next few days.
Stop: 50% under 1.2200 and 50% at 1.2153 (both initially).
Time horizon: Allow a few weeks.
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— Edited by Robert Ryan
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