Bullish Dollar Sentiment
What has been going on in the U.S markets? Tax deals have solidified, giving various U.S equities huge boost on their momentum and asset values. U.S Dow Jones 30 and U.S S&P 500 have each made new higher highs, smashing resistance levels at 24,000 and 2,600 respectively. Various companies are also report stellar performances and record breaking profits. In short, nothing was able to stop the bull run on the U.S assets.
The relative strengths witnessed on the U.S markets are translating into relative weakness on the Euro. The EUR/USD pair has revealed some technical weaknesses that had given us short-term trading opportunity to profit from the market.
The Euro has always been strong as shown on the above trading chart. The pair has bounced off the support level on three different occasions as shown by the blue oval. EUR/USD has been able to maintain its support level at critical 1.18300. However, the first sign of weakness came when the pair broke below this critical support level. Technically, faster moving average has also crossed under the longer term moving average, giving us a bearish trend bias. Together with the break in support, it further confirms our dominant bearish sentiment.
Swing Trade Entry Opportunity
After identifying the dominant trend, we look into short-term market retracement to help us get a better entry. Upon retracement, we managed to enter at about 1.18636. This trade had turned out well and had given us a 2:1 risk to reward profits.
As swing traders, our operation is simple, clean and easy. All we needed to do was to identify strong market trends using technical analysis or market structure analysis. After which, we look into precise, strong and high probable retracement zones to help us detect worthy trading points to rejoin the market swing structure to capture profits.
Trading is not about just profiting. Trading is about knowing when the market has presented us with high probability trading zones for us to enter to take the risk. Most traders are trading with gut feel. For us, we trade with a proven set of system. This system helps traders identify “hidden market brewing zones” that form prior to resumption of major market momentum.