Sunday, June 3, 2012

EURUSD Analysis 3 June 2012

Eurusd has been falling almost 90 degrees south without any significant retracement. With the recent rumors of greek being removed from euro, it makes matters worst. It is obvious that a short position is favored (why try to catch a falling knife?) but question is where would an entry give us a low risk high risk to reward ratio?

 The previous week low, 1.24951, would be a good place may retrace to before head south further. This coincides nicely with fibonaci ratio 31.8% which is a very common level for price to retrace to. Price is unlikely to retrace to the next possible of either 50% or 61.8% since bears are firmly in control.

On D1 chart, 1.24951 appears to be a month support in the past. With the head and shoulders in D1, the potential target is 1.12. Of course, exercise sound trade and money management strategies. I will be selling rallies everytime price retraces up.

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