Instrument: EURUSD
Trade Type: Long
Timeframe: [4HR]
Entry Price: [1.11390]
Stop Loss (SL): [1.11427]
Take Profit (TP): [1.11427]
Risk-Reward Ratio: 1.0.5
Outcome: Break Even
Entry/Analysis:
I placed a buy limit order at 1.11390 for EUR/USD, expecting a pullback to this key support level. Historically, this area has shown multiple rejections, indicating a strong zone for potential rebounds. My analysis is also influenced by today’s U.S. economic news release, which is expected to weaken the dollar. With inflationary pressures and the potential for Federal Reserve rate cuts, I anticipate the USD will decline, allowing EUR/USD to break out to the upside. Technically, the pair is hovering near strong support around 1.11361, which has held firm previously and suggests that the price may rally from this zone. Should the price break lower, further downside could occur, but the current fundamentals and technicals suggest that bullish momentum is likely. Managing this trade will require close monitoring of these factors, especially as the market digests the U.S. data release.
Exit/Outcome:
In this EUR/USD long trade, I identified a buying setup when the price action confirmed support at the 200-day moving average, reinforcing my bullish outlook. The pair initially moved higher, hitting my first target with strong momentum. However, the upward push quickly lost steam, leading to a pullback. Eventually, the price retraced to my break-even stop, which closed the trade with only a minor gain. By adjusting the stop loss to break even after the first target was hit, I ensured that my downside risk was mitigated while capitalizing on the initial bullish move. This dynamic risk management approach allowed for protection against sudden market reversals. The reversal occurred due to broader macroeconomic conditions, particularly uncertainty surrounding U.S. economic data and mixed signals from the Federal Reserve regarding interest rate policy. While there were early expectations of potential rate cuts, the Fed remained cautious, dampening hopes for immediate easing. This indecision fueled a resurgence of confidence in the U.S. dollar, as investors became more risk-averse amid concerns about prolonged high interest rates. Consequently, EUR/USD lost its bullish momentum and faced increased selling pressure as market participants adjusted their positions in response to the unclear outlook on U.S. monetary policy
Psychology:
Psychologically, I remained neutral throughout this trade. My previous experiences with EUR/USD taught me to expect reversals when the initial bullish momentum lacks follow-through, as seen recently. Even though the trade closed at break even, maintaining emotional neutrality helped me avoid frustration or disappointment. I held the expectation that the price could easily return to the entry point, given the broader uncertainty in the markets and the dollar's recent volatility. This mindset kept me calm and prepared for any outcome, whether it was continuation or reversal.
Trade Score:
Execution: 3/3
Psychology: 3/3
Overall Trade: 6/6
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