This Thursday morning Nov.25th 2010 we were live in the ProfitMongers Live Forex Trading Signal and Eduction Room when the EURUSD setup for a nice scalp trade short. It is Thanksgiving so the markets in the USA are closed, however there was still some decent price action during the European Session.
The chart shows how a initially at the 8am GMT London Open the EURUSD moved up to 1.3350, this corresponded with the 50% retracement of Wednesday's sharp move down during the European Session from 1.3413 to 1.3284. We did not get the live forex trade entry signal right on this fibonacci retracement level, rather we waited for price action to confirm a key reversal candlestick formation and some news hit the wires at 8:44am. Basically Moodys said they were placing several Irish banks ratings under review for a possible downgrade. The reaction was not automatic but when price showed us evidence of responding to this we did not hesitate to pull the trigger and enter the short EURUSD trade. As price moved in our favor, more news continued to come thru the news wires which supported the EURUSD short. ECB's Makuch said the Euro was slightly overvalued and then talk of an expected sovereign ratings downgrade for Italy was rumoured to be circulating the dealing desks. We took some profit around 1.3315 and were targeting 1.3290, but stretched this out to just above the big 61% fib of the September rally at 1.3270. The EURUSD 5 minute candlestick did close with a long lower wick doji right at 1.3290 while I was away, so this was a good reason to take the rest here, but regardless the stop loss was moved to lock in profit on the remaining position at 1.3320
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