*Update EUR/USD Limit Buy at
October 26, 2009 - 5:24 am by Forex District · Leave a Comment
The pair is steady in the European session on the back of a Chinese report stating Beijing should increase its Euro and Yen holdings in its foreign reserves. This sent the Euro higher to reach a 1.5062 high.
Despite the bullish comments, long Euro momentum seems to be weakening and risks for a correction intensify, however, the pair looks supported above the psychological level of 1.5000.
Ahead, traders will be attentive to corporate earnings and moves in the stock market.
Looking at the 4hour chart, EUR/USD rose to a 1.5062 high, before reversing slightly to trade at 1.5030, currently. Momentum moderated somewhat with bias turning to neutral in the near term.
Although higher levels are viable, a retracement is likely before renewed buying interest resumes; a preferred strategy looks to buy on dips.
Below current levels (1.5030), the pair finds initial support at 1.5000, followed by 1.4950 (50.0% Fib 1.4832 to 1.5059) and 1.4902.
Should the pair rise further on positive sentiment, higher equity and commodity prices, the pair finds initial resistance at 1.5061. Following this level, EUR/USD will encounter further resistance at 1.5090 and 1.5136.
Trading levels in play:
Muted price action. There are no solid trade recommendations at the moment for intraday moves.
*Update Overall market change, if entered stop was hit.
Limit Buy @ 1.4920 Targets: T1 1.4948 – T2 1.5090 Risk: 1.4860
* After 15 pips profit move stop to entry, take profit at will. Trade is canceled if it rebounds near entry and moves higher by 20 pips. Comments will follow if outlook changes.
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