Today I’ll write about the simple technical trade I made in EUR/USD. As the US Dollar was collecting strength, the pair continued its downtrend despite some positive reports from the Eurozone. The USD was successful in attracting more buyers, while EUR failed to attract them. However, the buyers seemed a bit hesitated on last Friday. I though the pair will go downwards again once the US traders came back.
Therefore, I went short at 1.3170 for EUR/USD. I wanted to place my stop loss above the descending trend, which is 1.3200. I placed my stop at 1.3210. I targeted a previous support level, 1.3120 as my profit taking level. I was very optimistic about my trade as US manufacturing MPI figures, which were released after I have entered into the trade, came out better than expected.
But, unfortunately the range between 1.3140 and 1.3150 came out as a difficult barrier. A lot of profit takers and buyers were waiting at that level and filled the market with lots of orders. After that, the pair went into consolidation until the end of European trading session. Without any major news events, big spikes were forming in the chart.
I analyzed that the traders are testing the market sentiment ahead of the US jobs figure and the ECB monetary policy declarations. From these events, I concluded that I should not take not more chance and close the trade right away. Later, I closed the trade with a loss of 25 pips.
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