Potential EUR/USD trade

It has been one-way traffic in the single currency for a while and EUR/USD will be back in focus today as Mario Draghi is set to speak.

Source: Bloomberg

The ECB’s TLTRO allotment last week didn’t obtain the sort of uptake investors would have wanted to see, and this seems to have put a dampener on the euro again. Draghi will be testifying before the European Parliament’s economic and monetary committee and this should help shed some light on the current state of the economy and plans for action.

The pair traded at its lowest since July last year at the open this morning and I feel it is likely the pair will test July 2013 lows at $1.2755 in the near term. EUR/USD is currently trading at $1.2834 and strength could be used as an opportunity to sell. Traders could consider selling a recovery to $1.2900 with targets towards the July 2013 lows. Once triggered, stops will have to be placed above $1.3000.

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