Selling the Euro on Hourly Pullback

This trade idea comes from spotting a momentum shift in the Euro against the US Dollar. The momentum gauge, called RSI, climbed above a high level that often signals the Euro was overbought, then dropped back below that level, suggesting weakening strength and a chance for prices to turn downward.

Hourly (H1): On this hourly chart, the EURUSD just showed signs of reversing after reaching a recent peak. The momentum indicator moved down from an overbought zone above 70 to below 70. A bearish candle appeared right after, signaling sellers stepping in. The levels set for stop loss and take profit follow the recent highs and expected downward move.

Market conditions: Important events in the next day include the US inflation report (CPI m/m and Core CPI m/m) at 13:30 UTC, which are expected to show smaller price rises compared to before. Earlier, a US central bank official speaks today, and tomorrow the European Central Bank leader will talk. These events could cause currency moves either way depending on what’s said or reported.

Risk: The trade could lose if the Euro price moves back up above the highest recent peak, triggering the stop loss just over there, which would close the position for a small loss. The target is set about twice the distance the stop covers, aimed at capturing a solid move down if the momentum shift holds. Watching the price action carefully around those levels is important.

Not financial advice.