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FOREX Chart Of The Day: EURUSD- Is It Time To Watch For A Short?

EURUSD has retraced back to key resistance but will the USD buying re-enter the market?

In this video, we identify the key levels to look for and what pattern we need to see before looking for a short opportunity.

Watch the video to learn more…

Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.

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In this video, we’re going to see if there’s an opportunity to go short on EUR/USD and why we could see the market fall further.

So, taking a quick look at the weekly timeframe, we wanted to be short from this area. This block of candlesticks is where the institutions were doing their businesses. That’s how they hide their orders – they conceal their orders with these consolidation patterns. When the price came back up to that point, we wanted to see if sellers would re-enter the market. They did and pushed prices further down.

The market is in an overall uptrend. We know that because we’re getting higher highs and higher lows on the weekly timeframe.

So, I’m looking for the market retracement phase to end at another point of control – this area here – which rests at 1.1831; we haven’t tested that yet.

Four-hour timeframe

If we go down to four-hour, you can see that we haven’t quite tested that level yet, which makes me think that we will get another move back down towards this 1.1831.

When we look at our daily impulses and retracement phases in a daily retracement phase, we typically see the market making higher highs and higher lows. On some occasions, we get a false breakout to the upside, but we have higher highs and higher lows here.

When the daily impulses to the downside, the four-hour makes lower lows and lower highs. Now, the price has come back into an area where we saw strong support recently. Could we see resistance here? And could the price move back down towards that 1.1831?

Market trends

Now, I’m not particularly eager to jump in on the four-hour candlesticks. I like to see how the market is shaping up first, then see what happens with the trend.

So, I’d like to see another push down from EUR, a pullback up and a double-top pattern. Double-top patterns are really good for identifying false breakouts in the market and identifying where the key market will head towards.

If we see a rejection of this previous structure high – you can see the Trading Guide and How To Master The False Breakout Pattern if you go to our YouTube videos – a double-top is essentially like a false breakout pattern because the price will go down, pull back up, and try and break through the highs, but rejects it.

This is why it’s such a strong strategy because it creates a fear among long traders. You can have a win-win scenario if you’re on the short side of things in a down-trending market.

If you wait for the price to come to the resistance level and form a double-top, and then the price starts to come back within this area, the buyers for the breakout will want to get out of their positions; that adds more sell orders into the position.

So, I want to see the price double-top here. Then I want to see the price break through these trend lines, break the lows, and then look for the continuation short down to that key structure low here.

EUR/USD is setting up for a potential move. We need to be patient, though, we need to see the four-hour trend start making some moves; we do have a previous four-hour structure here.

Ultimately, we have two levels to be aware of: we have 1957, and we also have 1.2. If the price heads up to 1.2, we’ll look for the same thing: a false breakout pattern, that double-top pattern, which will allow you to take a short position.

Thanks for watching this video update, and I’ll see you in the next one.

You can try trading with the EUR/USD pair with as low as $100 when you open a live account with Blueberry Markets. Fast execution, zero commission foreign exchange, and prompt customer support–that’s the Blueberry Markets experience.


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