EUR/USD Short Setup: Leveraging the Retrace for a Downtrend Play

Nov 18

EUR/USD has retraced slightly, offering a good entry point for a short trade. The pair remains bearish, trading below the 200-day MA, with strong resistance near 1.062 holding firm. Targeting the 1.0400 price area, this trade aligns with the broader downtrend, supported by both technical and fundamental factors.

Technical Overview:

The current trend is bearish, with the pair respecting lower highs and significant resistance at the 200-day MA. The initial target is set around 1.0495, with the long-term aim at 1.0400. Price action confirms a sell opportunity as the retrace reaches resistance areas.

Fundamental Context:

The U.S. Dollar has regained strength, driven by optimism around pro-growth policies and a solid DXY rally. Meanwhile, the Fed remains cautious on rate cuts, signaling slower changes ahead. In the Eurozone, the ECB continues a dovish approach, focusing on inflation concerns while speculative short positions on the Euro rise. This reinforces the bearish outlook for EUR/USD. Upcoming speeches and economic data, including Lagarde’s address and U.S. TIC flows, could further influence the pair’s movement.

This short trade aims to capitalize on the retrace within a bearish structure. With clear resistance levels and supportive fundamentals, the setup targets a move toward 1.0400. Risk management remains key as market conditions evolve.

Note: Please remember to adjust this trade idea according to your individual trading conditions, including position size, broker-specific price variations, and any relevant external factors. Every trader’s situation is unique, so it’s crucial to tailor your approach to your own risk tolerance and market environment.

Nov 19

Trade active

Current Status: The trade is now 0.7% in profit. It moved perfectly in line with the plan, gaining an impulse from the area as anticipated. Price action has respected the setup beautifully the position is trading around the Sunday open, where we saw an initial impulse.

Next Steps: I’ll continue to monitor closely, following the outlined strategy. For now, the trade is progressing as expected, and adjustments will be made if necessary to lock in gains or manage risk effectively.

Thanks for staying updated, and remember: always pay yourself as the trade works in your favor!

Nov 21

Trade closed: target reached

After returning to the entry level, EUR/USD resumed its downward move. The position is now 0.9% in profit. As a result, I have moved my stop loss (SL) to breakeven (BE). I also sold half of my position at 1.051 to secure some profits.

I’ll be closely monitoring the position, especially considering the dollar’s movements. Due to platform limitations, I won’t be able to add more detailed trade notes, so I’ll mark this trade as profit reached, but it will continue running until my upper targets are met.

A solid trade, good profits—remember to Pay Yourself!