After the spike to 1.1640 driven by temporary ceasefire news and USD weakness, I’ve taken a short position on EUR/USD. The market priced in too much optimism too fast, and I see limited upside beyond this zone in the current macro landscape. I’m positioned for a controlled retracement back toward the 1.1460–1.1520 region.
The play? Fade the overextension, follow structure, and manage from strength.
Technicals:
• The pair ran into a strong supply zone near 1.1640, which aligns with a previous liquidity sweep.
• Momentum has slowed visibly on lower timeframes, with candles rejecting highs and wicks printing upper tails.
• Daily and 4H SMAs are overstretched. The 20 SMA on H4 is accelerating upward, but RSI is near overbought and flattening.
• My short entry was taken with a stop above 1.1745 and first target at 1.1540, second at 1.1500.
• A potential retest of the 1.1660 zone could offer additional entries if invalidation remains intact.
Fundamentals:
• ECB vs Fed Divergence: The Fed holds firm on rates amid sticky inflation, while the ECB is under pressure to ease further due to weak growth.
• EU Struggles: PMI data remains in contraction territory; HICP cooling to 1.7% YoY suggests little reason for tightening.
• Political Instability: Germany and France both facing internal political crises — risk premia rising.
• Ceasefire Priced In: EUR rally on Middle East headlines lacks depth — conflict paused, not resolved.
• USD Resilience: Weak recent data aside, the USD remains a safe haven. Fed’s Powell reiterated that cuts aren’t imminent.
⚠️ Bias: Bearish as long as price trades below 1.1640. Watching how the market reacts to Fed testimony and ECB rhetoric this week.
🧠 Reminder: Don’t get emotional after vertical rallies. When everyone gets excited, I look for exhaustion. That’s where trades begin.
Note: Please remember to adjust this trade idea according to your individual trading conditions, including position size, broker-specific price variations, and any relevant external factors. Every trader’s situation is unique, so it’s crucial to tailor your approach to your own risk tolerance and market environment.
The play? Fade the overextension, follow structure, and manage from strength.
Technicals:
• The pair ran into a strong supply zone near 1.1640, which aligns with a previous liquidity sweep.
• Momentum has slowed visibly on lower timeframes, with candles rejecting highs and wicks printing upper tails.
• Daily and 4H SMAs are overstretched. The 20 SMA on H4 is accelerating upward, but RSI is near overbought and flattening.
• My short entry was taken with a stop above 1.1745 and first target at 1.1540, second at 1.1500.
• A potential retest of the 1.1660 zone could offer additional entries if invalidation remains intact.
Fundamentals:
• ECB vs Fed Divergence: The Fed holds firm on rates amid sticky inflation, while the ECB is under pressure to ease further due to weak growth.
• EU Struggles: PMI data remains in contraction territory; HICP cooling to 1.7% YoY suggests little reason for tightening.
• Political Instability: Germany and France both facing internal political crises — risk premia rising.
• Ceasefire Priced In: EUR rally on Middle East headlines lacks depth — conflict paused, not resolved.
• USD Resilience: Weak recent data aside, the USD remains a safe haven. Fed’s Powell reiterated that cuts aren’t imminent.
⚠️ Bias: Bearish as long as price trades below 1.1640. Watching how the market reacts to Fed testimony and ECB rhetoric this week.
🧠 Reminder: Don’t get emotional after vertical rallies. When everyone gets excited, I look for exhaustion. That’s where trades begin.
Note: Please remember to adjust this trade idea according to your individual trading conditions, including position size, broker-specific price variations, and any relevant external factors. Every trader’s situation is unique, so it’s crucial to tailor your approach to your own risk tolerance and market environment.
Trade closed: stop reached
Price surged sharply, stopping out the position with a controlled 0.93% loss. No regrets, the setup was valid, and the risk was clearly defined.From here, I’ll monitor the dollar’s behavior closely. If momentum stalls or reverses tomorrow, a fresh short might be back on the table.
This is the game: it’s not about what we want to see, it’s about trading what is, staying present, and always protecting capital.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.