Are you trading #EURUSD this week?
In this video we look at the trading range and how we can trade within it.
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 look at EUR/USD as price, maybe, pushing back down towards the lows.
So recently, we saw this move up from the election, and the market rallied back up into these previous structure highs, through here. Now typically, if we’re expecting these trends to continue, we would be looking for the market to break and close above, this high.
What we saw on Monday was these bearish candlesticks, coming through here. So, if I was to place a line just at the top of those highs – drag it out to the right – we can see that the market came up rejected in this area on Friday’s close. Monday is also closed. We then burst through the level, failed to close above, and close back below. So, this is a good sign that there’s a potential for the market to drop down. Typically, when we see things like that, we need to look at where prices could go to next. So, if I just draw in this zone, down here, and 1.16 is an area we actually spoke about when we were looking at the election – we were looking at the potential for the market to break and close below 1.16. If the market did break and close below 1.16, we were looking for further downside into 1.14 for EUR/USD.
Now, that didn’t happen, obviously. The election is still technically undecided, so we’re still getting this range-bound market out of EUR/USD. I’m expecting that to continue. That’s why I’m looking for this market to push back down into these lows, because I’m expecting the market to remain range-bound.
Now, if we just take a quick look down at the RSI indicator – and if I just bring this in slightly – what I want to look at, is the fact that the market has this trend line support, through here. So, when the market came back down into these lows then burst through that 30 level, the market was actually made a lower low on election day, but a higher low, according to the RSI, and we saw that rally up. I’m expecting the market to come and drop back down into this RSI level. So, that means that I’m expecting the market to drop a little bit further down. Now, I’ve actually drawn a trendline from this low to this low, there. This zone that we’ve marked out is looking pretty good now as areas to target. So, what I’m looking for is, if the price can come back down into this level, can we look for short opportunities in this period through here?
Now, if I go into the four-hour timeframe, one of the things that I look for is the four-hour trend because typically, when the four-hour trend changes like it did here, we see further downside breaks higher. Here, we see further upside, consolidation, breakout, consolidation, and breakout. So, if we get two confirmed closes below this current low, here, that low sits up 1.1779. If the price can give us two confirmed closes below this area, here, what I’ll be looking for is the price to pull back into this zone, continue that short move to the downside, looking for the price to target this key-structure, through here, around that 1.16 level.
So, EUR/USD is looking for potential short opportunities to continue. Obviously, if you don’t want to trade it against the US Dollar, you can use this as a tool to go and try the cross pairs like we discussed yesterday with GBP/AUD.
The GB Pound is actually rejecting this level of resistance at the moment now. Aussie is also having a bit of a bearish day, which is what’s causing GBP/AUD to stick around a little bit. But it’s starting to break down slightly through, here.
So, I’m expecting that as long as the GB Pound remains at this point, here, rejecting that, we could expect further downside on the GB Pound as well.
So, very similar to that: if you wanted to look at trade and Euro, I would look towards the stronger currencies, especially the NZ Dollar. That could really be a good place to look for some opportunities.
But keep an eye on the Euro Dollar. I like the opportunity on a pullback, and we’ll see if we’ll get two confirmed closes below this low, and if we do, look for further downside.
We hope our forex chart of the day analysis helps you in your trades. Practice trading the EUR/AUD pair with free $50,000 funding when you sign up for a free demo account at Blueberry Markets.