EURUSD Retracement Setup (October 21, 2013)
EUR/USD has been on a tear after breaking past the 1.3600 major psychological level but it seems that a pullback could happen before the pair rallies any higher.
On the 1-hour time frame, using the Fib tool on the latest swing low and high shows that the 50% Fib coincides with a former resistance level. This could act as support from now on, especially since it lines up with the 1.3600 major psychological level.
Stochastic is still moving down which means that euro bears are in control of price action at the moment. Once the oscillator reaches the oversold region and starts moving higher, the bounce could take place.
Buying at 1.3600 with a 50-pip stop and a 100-pip target to the previous highs would be a 2:1 return on risk.
By Kate Curtis from Trader's Way