EUR/USD 22 MAY 2012

EUR/USD – follow me on twitter @fxdailyforecast and stocktwits.com/fxg

No trade set-up on Euro yesterday, price bounced off the 50, we needed it down at the 618.

FOR TODAY:

Price rallied in the US session off the 50 level towards the B high, but didn’t break it on a sustained basis, we are back in the AB swing, a bearish cs formation after a BF test will initiate a short trade setup on this pair.

Longs are only considered down at the 50 – if we get bullish support here it will be considered a DD entry good for a 100 pip rally, else lower down at the 618/786 of this AB swing will be our next level of interest for long trade setups.

If we don’t get the set-up we are looking for then we don’t trade.

SHORT: WILL ONLY BE GOING SHORT IF:

We need a test of the BF786 followed by a bearish cs formation before we can consider short trade setups. Place stops 13 pips above the cs formation, max 1% risk, limits 60-70 pips.

If we don’t get the setup we are looking for then we don’t trade.

LONG: WILL ONLY BE GOING LONG TODAY IF

We need a retracement down to yesterdays 50 support – a bullish cs here will initate a long trade setup which will be good for 100 pips, else we will look for support lower down at the 618/786. Stops will be 10 pips below the cs formation, max 1 % risk.

If we don’t get the setup we are looking for then we don’t trade.