Shorting EURUSD

This trade was a roller coaster that turned out profitable. I decided it wasn't too late to enter in a short on EURUSD considering Europe's ongoing budget woes. There was a high when I entered the position, then I immediately began to lose money when an upward trend followed. I maintained my position for a while and then began working on a trading plan. The economic calendar for the US Federal Reserve showed that there will be an OMC meeting later that week. Considering the US economy is not in a full recovery to boost interest rates, I projected the EURUSD currency pair to rally to a certain point.

I was correct. Traders expressed their dislike of the Fed's decision to leave interest rates at a low level. I lost some money from the start, but I kept a close eye on the technical indicators for a reversal. A double top occurred that confirmed a drop was near. The US interest rate report was little news compared to Europe's fiscal mess. At this peak, the currency pair began to decline far beyond my break even point. The chart clearly showed a bottom where I exited my trade with a profit of $1,213 over the course of about 1 week. Entering at the double top could have granted me a higher profit.

*click on the chart to zoom in*