In the weekly trades, we are bearish on the EUR/USD and those technical levels played out almost exactly, putting the trade in a good position for the end of the week. Shorter term however, we will look for hourly CALL positions on a bounce out of the 1.3260 level in the EUR/USD, as this is a historical support level and the 61.8% Fib retracement of the rally from 1.30. This is more of a high risk position given that the medium term momentum is clearly to the downside but given the significant of this support level, it is unlikely we will prices fall through here on the first shot. This a one time trade, as a second test of 1.3260 is highly vulnerable to breaks and this event would not be a positive for the EUR/USD.
Good idea RCox, especially as this level is approaching at late US session and could be activated close to its end when the liquidity decrease and additional downside movements are less expected, but still too risky for me. I will see if there is good price action could enter a short term trade
Prices managed to regain the 1.3290 area after testing support but the major long term fib level has since been removed and this turns the medium term outlook for the Euro to bearish and we have to start looking at the psychological 1.30 level as the next potential area for bounces.
The structure in the attached chart can also be viewed as a head and shoulders pattern, with the Fib zone representing the neckline, this latest downward push confirms the pattern and adds to the bearish argument.