EURUSD Trading Idea

3 天前

EUR/USD dipped 0.2% on Tuesday, marking its third straight decline as it approaches the key 1.0500 level. The Euro’s recent bullish momentum is fading, with traders shifting to a cautious stance ahead of two major events:

• US CPI Data (Wednesday): A pivotal release ahead of the Fed's final 2024 meeting. Inflation is expected to tick up to 2.7% YoY (from 2.6%), with core CPI holding steady at 3.3%. Any signs of stalled progress could dash hopes for a third consecutive rate cut on December 18, fueling USD volatility.
  
• ECB Rate Decision (Thursday): The ECB is widely anticipated to deliver another quarter-point rate cut. Forecasts suggest the Main Refinancing Operations Rate will be trimmed to 3.15% (from 3.4%), and the Deposit Facility Rate is expected to drop to 3.0% (from 3.25%).
  

EUR/USD Technical Analysis: Entry Opportunity with SMC and Fibonacci

Using Smart Money Concepts (SMC) and Fibonacci retracement, the key zone between the 0.71 and 0.79 Fibonacci levels is shaping up as a critical area of interest. Following the creation of a fair value gap at the last high, the price is now testing the 50% Fibonacci level, setting the stage for a potential trade setup.

Trade Setup:

• Entry Point: 1.05520 (aligned with the 0.75 Fibonacci level)
  
• Stop Loss: 1.05697 (just above the 0.79 Fibonacci level for added risk protection)
  
• Take Profit: 1.04990 (targeting below the fair value gap for optimal risk-to-reward)
  

Risk/Reward Insights:
This setup offers a Risk/Reward Ratio of 2.98. By risking 17.7 pips to gain 53 pips, you're maximizing reward relative to risk.

Disclaimer:
Trading carries significant risks, and it’s essential to practice strict risk management. Always trade with a clear plan, use stop-loss orders, and never risk more than you can afford to lose. This analysis is not financial advice—ensure you understand the risks before making any decisions.

Follow for more trading ideas, strategies, and insights to level up your trading game!