The EURUSD has recovered from its false breakdown below its support area, visible in light blue in the above H4 chart, and is now trading inside of it. EURO was able to breakdown as momentum was strong enough from its sell-off which started inside of its resistance area marked in light grey. The Bollinger Band indicator supported the sell-off, but is now trading sideways as the EURUSD is seeking direction for its next move.
The lower band of the Bollinger Band indicator was able to break down below the support area while the middle band is trading inside of it and the upper band is trading above it. Forex traders may decide to realize floating trading profits after the strong sell-off. This is expected to result in a short-covering rally which will push the EURUSD above the upper band of the Bollinger Band indicator from where more upside is possible.
Forex traders are recommended to enter long positions at 1.1030 and below this level in order to take advantage from the expected short-covering rally. Conservative forex traders should wait for a breakout above the upper band of it Bollinger Band indicator before entering their long positions. A take profit target of 1.1490 has been set for a potential trading profit of 460 pips on the H4 Chart. More buy orders are expected after the EURUSD completes its breakout above the upper Bollinger Band.
Forex traders should protect this trade with a stop loss level at 1.0900 for a potential trading loss of 130 pips which will result in a Risk-Reward (RR) ratio of 3.54.
Long @ 1.1030
TP @ 1.1490
SL @ 1.0900
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