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Shorting The EURUSD Using Technical Analysis EURUSD daily

As traders, we understand that the outcome of every trade is unique but look to stack the odds in our favour of every trade we take to return a profit by taking only high-probability set ups. This requires a good understanding of price action and applying patience until clear criteria that determines a high-probability setup is met. (Remember, a good trade is one that meets your trading plan regardless of outcome. The challenge that many face is making sure they have the right information in their trading plan to start with.)

If the EURUSD continues to weaken, how would I look to enter this?

With the daily 200MA and the weekly 200MA both now acting as resistance levels, price action is starting to tick the boxes that make up my requirements for a smart entry. At the time of writing this, price had also broken and closed below the support level of November 2013. I also have the XTL filter producing consistent red bars and GET Stochastic giving a false bar reading telling us to continue siding with the bears. There is strong indication that further weakness is to come on this pair.

As trend traders, we target large areas where we can then apply compounding to accelerate profits. My final requirement, once a potential entry is presenting itself, is how much space is there for a trend to develop. To determine potential target levels once in a trend, I use round numbers and the highest and lowest price of the previous year. Looking at the weekly chart again, we can see we have the figure 1.3000 and then the low of 2013 (pink line at 1.2746) acting as potential support levels. If price breaks through these, then the figure 1.2000 is the next potential target level.

It has been sometime since the EURUSD, and also then the USDDKK which is inversely correlated, on the radar for trend trading opportunities. This is firmly on our watch list but still need to apply a little patience for now. If price continues to weaken, then this will offer a Smart Money entry for us to capitalise on.

Once an entry has been determined, the art to then making money in trading is knowing how to compound and manage exits. After all, when trading in the direction of the trend, what is more important; the entry or the exit?

Zaheer Anwari
Founder & Trend Trader at 

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