Trade Recommendation: EUR/USD
The Euro/US Dollar pair (EUR/USD) has been bearish since November 2009 when it generated a lower high of 1.5143. From that point, the pair has been posting a series of lower highs and lower lows. It then broke the 1.25 support in November 2014. This triggered a selling frenzy that drove the pair down to 1.03399 in January 2017. In its eight-year bear run, the Euro lost over 31% against the US Dollar.
At this price point, the market was showing signs of reversal. A bullish divergence was spotted on the weekly RSI. In addition, bulls were able to hold on to support of 1.05. With a bottom in place, bulls ignited a rally that saw EUR/USD climb to as high as 1.25543 in February 2018. The pair has been pulling back since. This could be your opportunity to buy the dip.
Technical analysis show that the Euro/US Dollar pair is well on its way down to 1.15 support. Interestingly, this price point is also the 50% Fibonacci level. This is often the level where the price bounces after a big pullback. Also, a hidden bullish divergence can be seen on the weekly RSI, suggesting to buy the dips. Lastly, the market is nearly oversold.
The strategy is to buy as close to 1.15 as possible. If bulls preserve this support, they may spark a rally to our target of 1.20. Sell immediately as there’s a very good chance that 1.20 could be a lower high.
The process may take a month.
Weekly Chart of Euro/US Dollar on Forex.com
As of this writing, the Euro/US Dollar pair is trading at 1.15542 on Forex.com.
Summary of Strategy
Buy: Buy as close to 1.15 as possible.
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