Trade of the week: long EUR/USD
Since EUR/USD resumed its ascent, we would like to go long with a stop loss below last week’s low at $1.0794, and an upside target between $1.0944 and $1.1000.
(AI Video Summary)
Previous short S&P 500 trade outcome
In this week's "Trade of the week" video, Axel Rudolph first talks about his previous trade on the S&P 500. He went "short" on this trading index because he noticed a negative divergence on the Relative Strength Index. However, the trade didn't work out as planned because the market went higher and reached new record highs. Although he hasn't lost any money yet because his stop loss hasn't been triggered, he mentions that if the S&P 500 continues to go up, he might have to exit the trade.
This week's trading idea
Moving on to this week's new trade idea, he focuses on the EUR/USD. He notices an "ABC Elliott Wave correction," which suggests that the euro could continue to rise in value. He also highlights that the euro has moved above its 200-day moving average, which is a good sign for further potential gains. So, he proposes going "long" on the EUR/USD pair, meaning he wants to buy the euro and sell the US dollar.
He mentions that there are important upcoming events, like a speech by Fed Chair Jerome Powell and a monetary policy meeting by the European Central Bank, that could influence the currency pair. However, because the trade has a low risk and potential profit, he still believes it's a good idea to go long on the EUR/USD pair.
He gives specific details on his trade, recommending an entry price of around $1.0844 for the EUR/USD pair. He sets an upside target of $1.0944 to $1.1000, which means he is hoping to make a profit when the euro reaches that level against the US dollar. To limit his potential losses, he also mentiones a tight stop loss at $1.0794, which means he will exit the trade if the euro falls below that price.
In summary, the video recapped the previous trade on the S&P 500 and explained the new trade idea on the EUR/USD pair. He emphasises that the new trade has potential for profit and involves low risk.
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