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In our #Forex Market Outlook this week, we looked at #EURUSD for a potential pullback into key resistance levels.

Now that the price has tested the level, what’s next?

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 take a look at EUR/USD. We’ve seen that the price has come up into our key level, so I wanted to break this market down and show you what we’ll be looking for next.

We talked about this at the start of the week. In particular, we looked at the fact that the price comes back down to a supporting level of 1.2 and has found some support. We saw buyers step back into the market largely due to the NFP report, and we were looking for a couple of different areas for the price to come back into. The first area was up at this 1.21 area. The second was at 1.2165 and what we wanted to see was a price push back up into this level. And then, give us either a bearish sentiment from here, like a bearish bit of price action, or a change in trend on the four-hour timeframe. It’s very similar to what is happening up here, where we have the resistance, support, support, and resistance. If the price came up here, we’re looking for something similar there.

I wanted to go down into this lower timeframe and show you what’s going on. We spoke a lot about when the market goes into impulse and retracement phases and how we can anticipate and trade those moves. Essentially, what we’re looking to do in those trending environments is to buy back down when in an uptrend, buy lower prices to trade it up to the higher prices, and then in a downtrend, we’re looking to trade from higher prices down to the lower prices.

One way we can do that is by using the lower timeframes to our advantage. The higher timeframe could be where we gather our bias. The lower timeframe can be where we execute and identify whether those plans are coming to fruition.

What I like to look for in these pullback areas is 30-minute changes in simplicity, and depending on what I’m doing on that day as well. If I’m looking for an intraday move, sometimes I’ll go to the lower timeframes.

But essentially, we talked about buying EUR/USD on a pullback here. Now, it didn’t quite make a higher timeframe entry that we were hoping for. However, it did come back into the support and started to rally from this point. If I go down into, let’s say, the 15-minute timeframe and zoom right out – the price gives us a clue that it’s going to start moving to the upside, and that is a breakout move here. You can see when the market is in that downtrend; we get lower lows and lower highs. When the market changes that, and it breaks out this high here, this high here, and this high here, that’s a massive sign that the buyers are stepping back into the market. And look what happens, we retest, and the market moves straight to the upside in-line with that daily retracement phase that we’ve been talking about.

What I need to wait for, here, is for the same thing to happen. I need to wait for the four-hour to reject this area. Because remember, we want to make sure that the market environment is correct before we look at our trading strategy. I need to see the market break away from here, pullback, retest like it did over here, breakout, retest, and if we get that similar price action through here, we can begin to look short in the market. Only then can we look to start to short because that’s what will give us a higher probability of getting involved with the market. If the market continues to press to the upside, then we have to wait for our next resistance level, or if you want to be a short-term buyer, you can be like we showed you here, on that 15-minute cycle. But essentially, if the price gets back to that 1.2165 level, I’ll be looking for the same thing. I’ll be looking for the price to pull back and hit the level again. If we start to see a bearish sentiment on the second test, that will allow me to look for further shortened opportunities.

That is how I’m going to look to trade EUR/USD at the moment. We’re back at this level. I’m not going to blindly short form here. It’s not worth it because you don’t have the full picture at the moment. If anything, it’s still looking rather bullish here. If we look at this 15-minute timeframe – look at the pullback; it’s a very shallow pullback. There’s not a lot of sellers involved here at the moment. There’s a lot of consolidation, suggesting that larger players in the game are starting to build positions around 1.21, but we have to wait to see and let the market decide what it wants to do. To me, it’s looking a bit more bullish, and we may even see that breakout to the upside, towards 1.2165, which was our most ideal area to get short going into this week.

Keep an eye on EUR/USD. The price has hit our major resistance level. Let’s see what happens next.

Thanks for watching, and I’ll catch you in the next video.

Get a feel of trading while you hone your skills in looking out for EUR/USD trends with a demo trading account. Blueberry Markets offers a free demo account with up to $50,000 seed fund. Click here to sign up for a demo trading account. Our highly committed customer support team will be at hand to help you have a hassle-free trading journey.

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