EUR/USD Superior Reward to Risk Ratio Target 1.19000

 

Historical resistance could now be current support at 1.18280 zone, where we must hawk any type of bullish candle reversal or price behaviour for upside entry. EUR/USD also has a 50% Fibonacci cluster at this zone providing further confirmation for support.

EUR/USD

 

Key Points:

  • Price holding above the 200 EMA
  • Price holding below the 50 EMA
  • 50% Fibonacci support level (Range September Low – September High)
  • Must watch price around the 200 EMA
  • Watch RSI for divergence if price makes a lower low, but RSI fails to do so.
  • IF: This is a WXY wave, it meets the 3 Wave structure for a higher time frame B wave.
  • Elliott Wave suggests that B waves must have 3 sub – waves. Even though our X sub – wave is sharp, it still retraces 50% of W which is a pass, now we expect one more leg to complete Y before the higher time frame C wave down.
  • Please understand that Elliott Wave can have many alternative wave counts and each trader may see this differently.

Key Levels:

Support – 200 EMA, 1.18280, 1.18100

Resistance – 1.18575, 50 EMA, 1.19000, 1.19175

Entry Zone:

Optimal entry provides the greatest reward to risk ratio while supporting entry is a zone for reversal signals.

Optimal Entry – 1.8406

Supporting Entry – 1.8500

Candle Reversals for entry

  • Bullish Hammer
  • Bullish Engulfing
  • Bullish PiercingCandlestick

 

The Risk:

As traders, it is your job to mitigate the risk and only trade structures that provide high probability and great reward to risk ratios.

If you are not comfortable with defined exit levels, experiment with Moving Averages to help set solid exit rules to protect your capital.

IF: Price breaks below 1.18256 level and violates 200 EMA but fails to reclaim – this would suggest the structure is not in our favour and would be wise to reduce exposure or close the trade until a solid signal gives us reasons to re-enter.

Reward / Reward Targets:

Optimal Entry 1.8406 – Target 1 1.19000 = 4x Reward to Risk

Optimal Entry 1.8406 – Target 2 1.19175= 5.3x Reward to Risk

Supporting Entry 1.8500 – Target 1 1.19000 = 2x Reward to Risk

Supporting Entry 1.8500 – Target 2 1.19175 = 2.7x Reward to Risk