Eur/Usd Trade Analysis

The Eur/Usd has broken the recent resistance area of 1.4150 and 1.4200 in the last few trading sessions. The pair is likely to challenge the recent high of 1.4250 and then we will look to see if the price will bounce off of that key resistance or if it will break through to make new recent highs. A contributing factor will be if the other Dollar pairs can rebound. The Dollar index had a slight bounce recently and has since fallen off of the recent comeback. If the key support area on the USDX gets broken then the Dollar index will move to challenge the recent lows.

Trade Plan

When the Eur/Usd gets near the 1.4250 area I will be looking for signs of a powerful break out or signs of a bounce off of the highs. The way I will determine how the market will react is to examine the candles. If I see stalling and then a reversal bearish candle on the 1 hr chart then I will take a short with a tight stop. If I see a strong bullish breakout candle I will take a long. Either way I will use good money management skills by limiting risk and attempting a 2 to 1 risk to reward ratio. On a Fundamental note Adam at Forex Blog has posted an article outlining some of the Dollars Strengths.

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Casey Stubbs is the founder of Winners Edge Trading, which is one of the most widely read forex sites on the web. Winners Edge Trading has trained thousands of people to trade the Forex markets.

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