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Entering the ECB meeting, there is a lot of pressure on the euro. So, if you opt to sell, what levels should you be looking at?

The team at Morgan Stanley long term and short term lines, looking at recent waves as well:

Here is their view, courtesy of eFXnews:

Morgan Stanley picks EUR/USD as its FX chart of the week where MS is bearish on the pair and is looking to sell. MS gives some insights on the levels at which traders should sell the pair and place their stops.

On the 10-year EUR/USD chart:

“Breaking below 1.28 in recent months meant that EURUSD broke a trend line formed since 2001, providing a stronger bearish signal (chart). EURUSD is currently in a C-wave beginning from a peak of 1.3993 in May. We expect EURUSD to trade below the A-wave bottom at 1.2043,” MS projects.

10 year EURUSD chart December 2014 towards the ECB

On the 2-year EUR/USD chart:

“EURUSD has come under selling pressure after breaking out of the triangle in May and has since fallen from a peak of 1.3993. An impulsive downwards sequence has formed and is currently in the (5)th wave which is nearing completion. Crossing below 1.2250 breaks the bottom end of a long-term trend channel, supporting the bearish view,” MS argues.

2 year EURUSD grapht December 2014 towards the ECB

On the 90-day EUR/USD chart:

The sub-count in the (5)th wave is incomplete giving a bearish signal. We would sell around current levels and put a stop around 1.27. If the subcount of iii is correct then EURUSD would not extend beyond the 1.26 high. However, if a new high is made then we would expect EURUSD gains to remain limited towards the 1.27 area, where we would sell,” MS advises.

EURUSD 90 day sub wave count for euro dollar trading

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