Trade of the week: long EUR/USD
Learn about the EUR/USD long position strategy, targeting a potential trend reversal amidst US tariff impacts and euro stability.
Current trade overview: long position
In the current market environment, a trading opportunity has been identified with the EUR/USD currency pair. The strategy involves taking a long position based on recent market movements and potential bottoming patterns.
Trade setup
- Entry point: long EUR/USD at $103.26, anticipating a medium-term trend reversal
- Stop loss: set at $101.75, positioned below the January low to limit potential losses if the market moves against the position
- Target: aim for an upside target above $107.50, capitalising on the expected trend reversal
Risk-reward ratio
This trade offers a favourable risk-reward ratio, making it an attractive proposition for those willing to take on the associated risks. However, it is important to note that this is a high-risk trade, and sometimes the best decision is to refrain from trading.
Market context
The EUR/USD has shown signs of forming a bottom, with the euro holding above the January low despite US dollar strength driven by newly imposed tariffs. Traders should be aware of the potential for further euro strength as market conditions evolve.
Cautionary note: while this trade presents a structured opportunity, market conditions can change rapidly. Traders are advised to consider their risk tolerance and market outlook before engaging in this trade.
The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.
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