My (short term) fundamental bias on the Euro is lower, and price action has presented me with a setup I like to play, so I shorted at 1.3340 and added at 1.3280 after the trade began going in my favor. The trade has what I consider to be a good probability of hitting the target due to what I call a price inefficiency (a rapid directional move in price without previous price action close behind it.) If the 1.3250 support barrier breaks (previous support + 200 DMA) I think the price inefficiency will get run and the 1.3150 TP will get hit fairly quickly, although price may pause at the 2nd 200 DMA around the 1.3200 figure.
My Stop Loss
I consider managing my risk to be the most important part of trading. In this case I've defined my risk at 1.3375. I put soft resistance at 1.3350. If that breaks, and we hit 1.3375, I think there's a good chance of stops being run above the 1.3400 figure. (Previous swing high is 1.3405 - not a solid stop run, although stops really hadn't had a chance to accumulate there before the move through the big figure.) So my cost average is 1.3310, with a SL 65 pips higher and a TP 160 pips lower - roughly a 1:2.5 risk to reward ratio.
Below is my 1H chart.
Alternative Scenario
If we do see a move higher to 1.3350, that level should prove crucial to directing future price action. It should either serve as stiff resistance and reject price back to the 1.3300 figure (and ultimately lower) or it should serve as a brief zone of consolidation before a move higher (past my SL at 1.3375) on its way to run stops through 1.3430-1.3440.
Note: This is not a trade recommendation. Trade at your own risk.
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