EURUSD – SELL STOP – 28th October 2020

EURUSD – SELL STOP – 28th October 2020 (Closed)

Good afternoon team,

The DXY has seen an uptick due to Corona-virus fears across the EU and Trump narrowing the gap in the polls.

The major question leading into the EU session is will the ECB step in and provide further stimulus due to the mounting corona-virus risks across the EU. The ECB will provide their statement and interest rate decision at 11:45pm tonight.

The cold weather season is yet to hit full force across Europe and we are seeing an explosion in cases across France, Italy, Germany, Belgium and Spain. New lockdown measures have been announced across France and Germany. Overnight the European equities and the EUR came under pressure as restrictions are set to last until the end of November.

The pressure is mounting on ECB President Lagarde to provide further support to the European economy through the PEPP. We are expecting more from the ECB, however, some analysts think this week is too early for them to step up the program. If there is no indication into further support we could see downside across the EUR again.

We are positioning with a SELL stop position in anticipation of a move lower.

EURUSD 4 Hour Charts

EURUSD 4 Hour Charts

There has been a breakdown from the bear flag structure, however, the breakdown is not convincing just yet. We are currently seeing a retest of the bear flag. We are waiting for the market to move back towards recent lows to enter a sell position.

Trade Setup: SELL STOP – Entry price 1.1718, stop loss 1.1778 and take profit target 1.1618.

Stop loss: 60 pips

Take profit: 100 pips.

Trade Setup
SELL Stop

Entry
1.1718

Take Profit
1.1618

Stop Loss
1.1778