FX.co ★ Trading idea for the EUR/USD pair

The decline in the US dollar, associated with the expectations for a massive stimulus package in the US, carried the EUR / USD pair to 1.19000.

According to technical analysis, this movement formed a double bottom on the daily chart, which is a good area to open trading positions.

This area is also perfectly visible on the hourly chart, therefore, some may say it is illogical to short the euro against yesterday's many long positions. However, yesterday was a day off in the United States (due to Thanksgiving), so at that time, market volatility was low because US stock exchanges were closed.

Thus, it is only rational to continue working for a fall today, especially based on the price movements in the EUR / USD pair.

As we can see, the quotes have formed three wave patterns (ABC), in which wave "A" is one of the initiatives shown in the chart above.

Based on this scenario, it is profitable to open short positions after a 50% retracement from current prices, as such would allow the quotes to break the level of 1.18800.

Of course, traders still need to monitor and control the risks to avoid losing profit. Trading is very precarious, but also very profitable if right approaches were used.

(Price Action and Stop Hunting were used for the above strategy)

Good luck!