SHORT EUR/USD from 1.1125
Euro Fx/U.S. Dollar FX:EURUSD
forextraplaces
"The trend is your friend" is a well worn FX trading adage.
Its meaningless.
The trend is your friend if the trend is heading in the same direction as your trade but if its not then the trend is your enemy.
EUR/USD is in an uptrend and has been since 1st August.
The price has now hit a level last seen on the 28th December 2023.
The last time the price was at this level, the trend ended and reversed 550 pips.
Anyone LONG on 28th December 2023, following the trend, would have lost heavily without a STOP in place.
Trends always end eventually and when they do they present a trading opportunity.
I have a SHORT EUR/USD trade on becuase:
a) we are at a historically significant high
b). H4 on the Andean Oscillator see the red SELL line rising off zero as the green BUY line ceases rising.
c).H1 Andean Oscillator see the red SLL line rising signifcantly as the green line falls.
d). RSI on H4 is decling from overbought levels.
e). MACD on H4 has seen the fast MA move south over the slow MA
GBP/USD daily candle is red (BEARISH)
NZD/USD daily candle is red (BEARISH).
Trading is gambling. No-one knows where the price of any instrument will be in an hour or in 4 hours so EUR/USD MAY decline from these levels.
This is the key - the price MAY decline.
I have a tight 25 pip STOP above the recent high so my risk/reward if EUR/USD does decline makes this a trade worth taking.
But just to return to my opening line - EUR/USD IS technically still in an uptrend which is why a STOP is MANDATORY (it should be for ALL trades).
We cannot rule out EUR/USD BULLS stepping in to try and drive the price higher particulalry as the USD is WEAK currently.
