EUR/USD Weekly Forex Signal - 31 December 2014

John Ursus
John Ursus
on December 31, 2014 | Updated On Dec 31, 2014

By: John Ursus

Timeframe: W1

Recommendation: Long Position

Entry Zone: 1.2125 – 1.2175

Take Profit Zone: 1.3025 – 1.3075

Stop Loss Zone: 1.1925 – 1.1975

The EURUSD has been exposed to a sharp correction over the past twenty-eight trading weeks. After a breakout above 1.4000 failed a range of economic data released out of the Eurozone lend support to the case for a much weaker Euro. The correction took this currency pair from an intra-day high of 1.3993 to an intra-day low of 1.2123 where the EURUSD currently trades while it is approaching a major double bottom formation. This currency pair could face a short-covering rally from extreme oversold territory.

The sell-off took the EURUSD well below its 38.2 Fibonacci Retracement Fan, and forex traders should look out for a sharp reversal as the double bottom formation is forming. A short-covering rally is expected to take the EURGBP back into its 38.2 Fibonacci Fan from where more upside is possible. Forex traders are advised to spread their entries over a 50 pips range between 1.2125 and 1.2175. The downward potential appears to be rather limited while the upside potential remains very attractive.

EURUSD 123114

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About the Author
John Ursus
Professional trader and technical analyst with over one decade of experience. John believes that being a successful trader means you have to be in the minority and defy what is popular. Trading is an art form and not science and there are more myths about trading than there are successful traders.
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