EUR/USD has completed a nice 5-wave rally on the hourly charts from 1.2980 and I think this pair may be ripe for a retracement back towards 1.3110/20. EUR/JPY fell during Asia yesterday in spite of rises in the Nikkei so I would think that a lower Nikkei today might lead to even heavier selling. EUR/GBP looks to be consolidating its recent bearish turn and with cable stalling at Fibo resistance ahead of 1.60 option barriers, this would seem like another good reason to try shorting EUR/USD for a quick 150 pips.
Therefore the trade idea I’m thinking about is to sell another failure at 1.3260 with a tight stop above 1.3300 and a profit target at 1.3125. The risk-reward certainly does seem very attractive.
