EURUSD Trading Idea

hace 3 días

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.

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