- When two currencies approach currency parity, a single unit of one may be exchanged for a single unit of the other. For the most important Forex pair in the world, EURUSD, it would mean that €1 buys $1
- Most traders prefer rounded currency values than random ones and they especially love parity, which is the single unit of 1. Algos and institutions selling the trades also love to trap bulls and bears around the round 1 number. Furthermore, news reporters love to write about that line in the sane. Support and resistance tend to emerge around rounded price levels because traders automatically put stops and take profits there.
- As the market is setting itself up for EURO and USD parity, we look at price levels to scale in for a possible Long and fade the recent move down, anticipating a rebound, even a partial one, that can offer an attractive reward vs risk ratio
- The trade idea is to aim to buy the Euro after it possibly crossed down and worth less than 1 USD. The idea is also relevant for buy and holders who want to find an interesting entry price for the long term hold of Euro
- The EURUSD trade idea is a Long with 3 buy orders
Trade Idea (Long EURUSD) with the Following Three Buy Orders for EURUSD:
Average entry price for the EURUSD Long, conditional to all 3 buy orders being filled: 0.9908
Stop Loss: EURUSD at 0.97943 (4.25% higher than average entry price of the EURUSD Long position)
Take Profit: EURUSD at 1.03287 (1.15% lower than average entry price of the EURUSD Long position)
Reward vs Risk Ratio: 3.7 (reward is 3.7 times the risk)
EURUSD Technical Analysis with Price Chart
EURUSD Technical Analysis and Price Chart for Trade Idea
EURUSD Technical Analysis Video and Trade Idea Explained:
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This article was written by ForexLive at www.forexlive.com.
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