Near-Term Outlook for the EUR/USD

Where is the EUR/USD going for the rest of this month?? 

The European Central Bank policy meeting on 21 April 2016 ended without any surprises. Traders shift attention to the US Fed’s policy meeting on 26-27 April 2016. Though there are no expectations of a rate hike from the FED in this meeting, the market participants will watch for any clues of a possible rate hike in the mid-June meeting.

What does the chart forecast?

eurusd 1 rakesh

The currency pair has been in a trading range for more than a year. The pair has returned from the resistance level of around 1.150, for the third time, as shown in the chart. Hence, long positions at the current level are advised only above the resistance level or on dips.

eurusd 2 rakesh

The pair is at the top end of the trading range and has broken down the uptrend line as shown in the chart. The 20 EMA, which acted as a support on two previous occasions has not provided any support in the recent fall.

However, we could see the 50 EMA act as a support level hear as it’s in accordance with the Support level of 1.1230 range (shown in the chart as a horizontal line).

The pair is forming a bearish descending triangle pattern. In the coming week, the pair is likely to trade within the triangle, though intraday, it can violate the support and resistance levels. In a situation like this, you’re not going to find high Risk to Reward setups–as those usually come in trends–the EUR/USD is suited for range-trading strategies where you can take advantage of the bounces back and forth.

With that said, the market has been tiring in this type of range and a breakout could be coming soon.

**Remember, most traders think that a breakout means you need to jump on QUICK… but this is not the case. If it’s a true, sustained move you’ll have plenty of time. Let a breakout prove itself and then catch the next 60% of the move rather than trying to capture 100% of the move.

You can make a LOT of money by just capturing portions of a given move. Remember that!

On a breakdown and close below the supports, the lower targets are 1.116 and 1.098. The level of 1.140 should offer a strong resistance on the way up.

Hope this helps you as you look at the near-term possibilities with EUR/USD.


Important Disclaimer: Learn to Trade for Profit provides educational education. We are not trading advisers and we do not make suggestions to our visitors to buy or sell any particular commodity or security. The information on our website is based on personal opinions and is to be used for educational purposes only. Any actions you take based on the information on our website is to be at your own discretion. Trading Is Risky: Never, ever trade with funds that you cannot afford to lose. All trading investments (Forex, stocks, options, futures, etc.) are risky. Never trade with borrowed funds or your life savings. U.S. Government Required Disclaimer: Commodity Futures Trading Commission. Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures, stocks or options on the same. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.