Trade Idea: EUR/USD - Sell at 1.4000

EUR/USD - 1.3890

Most recent candlesticks pattern : N/A
Trend : Sideways
Tenkan-Sen level : 1.4035
Kijun-Sen level : 1.4070
Ichimoku cloud top : 1.4129
Ichimoku cloud bottom : 1.4020

Original trading strategy : Sell at 1.4100, Target : 1.3980, Stop: 1.4150

New strategy is : Sell at 1.4000, Target : 1.3850, Stop: 1.4050

The European single currency fell again without significant recovery and dropped to as low as 1.3803, however, euro held above recent key support at 1.3793 and has recovered as traders booked profit on their shorts. As price clearly dropped below the Ichimoku cloud area today, this minor 'hammer' candlestick on the 4 hour chart suggests small correction back to the Ichimoku cloud bottom (support turned resistance) is quite possibe but selling initerest shall appear again there and we expect price to hold below the Tenkan-Sen (now locating at 1.4035), then the pair shall fall again. Nevertheless, only a clear break of the 1.3793 support would further confirm our bearish view for a stronger correction of recent rally to 1.3700.

Therefore, we prefer to sell on rebound but one is strongly recommended to square their short position when price approaches 1.3793 support. Only if price rises above the 1.4070 resistance (is a previous support as well as current level of the Kijun-Sen) would change this view and this could imply the correction from 1.4339 might have ended and rise to 1.4135/40 (approx. 61.8% Fibonacci retracement of 1.4339 to 1.3803) is on the card.