Transcript of Video
Hello everyone, this is today’s video analysis for January 7, 2019. Today we’re taking a look at the Euro versus the US Dollar [EURUSD].
Now, I know this is going to sound like a broken record from last week, but it’s the truth. Everything is still the same. Today, as it was last week for the EURUSD, we’re still challenging and testing the downward trend line. The blue trend line you see here on the chart and the 100-period daily simple moving average right around the 1.1450, 1.1480-level. So, once again, we see the EURUSD coming up, testing underneath it.
So, the question is will we do what we did last week, bounce off of it and go back down, or will it finally get enough momentum and sentiment to break through that 1.1480-level and begin a push higher. We haven’t had that question answered for us yet, so we’ll continue to watch for opportunities here on the EURUSD in the next few days around this same level that we were looking at, at the beginning of last week.
Let’s zoom it in a little bit on the blue trend line here and the current market price, and there it is. Last week we were right here into the pink zone. Went all the way down to the green zone into the 1.1330, 1.1310-level, giving quite a number of people thinking that this was it. It was finally going to see enough momentum, break through the green zone and go lower. We have this black trend line down here, showing the rising lows along the bottom of the chart, but just couldn’t get through there.
Couldn’t break through the 1.1310-level, 1.1300, and turned right back around in the last three days of the week and challenged back up here towards the pink-shaded area. So, here we are challenging the 1.1450-level as resistance. Well, the first simple answer to our trading strategy for the day today is don’t buy it right now. Buying underneath this pink zone seems like a bad idea. It’s not too hard to see that going all the way back into October of last year. We go all the way back here into, well, we got underneath here. October 24, we challenged underneath it. November 2nd.
So, since really let’s just call it November 2nd, we have seen resistance here into this pink zone. So, buying underneath there just doesn’t seem like a logical trading decision because if it does the same thing it’s done since November 2nd, you’re going to be kind of unhappy about it. So, the only real reason to buy this, go long, is if it can get through this pink-shaded area, 1.1480, the 100-period moving average, the blue trend line. If it can break through there, that becomes your long opportunity.
Of course easy hindsight to see the long opportunity was down here at the green zone. But for the day today, just buying underneath that pink zone just doesn’t seem like a logical trading decision for the day today. Only if we can get the market to get above here. Let’s just kind of draw out a hypothetical candle here. If it can get above here, then we’ll look for it to go higher. If it can’t, the other side of the story is we begin looking for clues and evidence of resistance and selloff again here for the EURUSD. Why? Because that’s what it’s done since November 2nd. We’ve hit this pink zone and sold off from 1.1480, 1.1450. So, we can begin looking for clues and evidence of that.
Of course we need a good solid run. We need the USD to have a good positive movement this week. We need the USD to rally this week if that’s going to happen. That needs to happen for this to bounce off the pink zone. Go back down towards the blue or possibly even the green zone all the way down here at the bottom once again. So, this the area we’re focusing in on.
Four-hour timeframe. Zoom it in a little bit and there it is. Same thing. It’s nothing really new. We could see what’s been happening over the past couple of weeks. We need one of two things to happen. Either it gets above if we’re going to have a long opportunity, or for the intraday, I think as long as it stays under that pink zone, I would rather be watching for selling or short opportunities here for the EURUSD underneath that pink zone.
Your risk-reward is better for going short and selling the EURUSD right now. The risk right now is that it gets above the pink zone. Stop loss is above. Probably you can go to last week’s high here, which is 1.1496. So, we’re just talking 1.1505, 1.1510 at the max with a stop loss if you decide to go short here, but I think we need some evidence. Some evidence of selling pressure before we decide to go short, but that would be the most logical trading scenario risk-reward-wise even, is that you’re more likely looking for the market to pressure into here, find resistance, selloff, sell it or go short. Stop loss above. Target back down to the blue and the green zone.
As long as it’s underneath here, I just don’t think going long for the EURUSD today seems like a logical trading solution.
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