Transcript of Video
Hello everyone, this is today’s video analysis for January 22, 2019. Today we’re taking a look at the Euro versus the US Dollar [EURUSD] for today’s trade analysis.
Here we are looking at the daily timeframe. Long-term, if we go back – what – about a year or so, we have been in a downtrend. It’s not too hard to see that. Go from the top of the chart to the bottom of the chart. Overall, we’ve been in a downtrend. There’s these periods that I have in the black boxes where we were ranging or periods of congestion. You could see all the way at the top. Last year, for about three or four months, we were bouncing around up here at the top of the chart.
Then it got a significant downtrend, pushing lower through into May, and then went into a little period again here. A little bit of a dip, but then right back into the same area. Finally got underneath it and then towards the end of last year, October, November, December, going into the smaller box down here, bottom right-hand corner of the chart. And that’s where we sit right now. Here, the beginning of the year.
January, we’re into that range or zone again similar to what we were at last January, February, where we were just in this box at the top left-hand corner of the chart. So, we’ve got to watch for opportunity. Looking for at least at some point the return of a significant trend. Either the return of the downtrend and we look for new lows to be made down into the 1.1200s or even the 1.1100s, or we’re looking for reversal for this to start turning back higher and maybe work its way back into the 1.2000s again.
And we’re in that area of no real trend. Now, if we go into the shorter viewpoint, take our perspective in a bit, we zoom in a little and now we could see in the past two weeks at least we have been more bearish than bullish. The red line here shows that the market has been moving lower, pushing under the 100-period moving average. Settling down here into the blue zone. 1.1375, 1.1405. And now yesterday and today holding underneath that was support, now acting as resistance. 1.1375, 1.1405 is that blue-shaded area.
So, here we are holding underneath what is now acting as resistance yesterday and so far today. If it stays underneath there, and let’s go with all the if thens. If it stays underneath 1.1375 today, then we may expect the continuation of the fall down to the green zone, which is 1.1330, 1.1310. That’s not too hard to see. That’s what the market has been doing over the past couple of weeks, so we wouldn’t expect anything really different here.
So, if staying under the blue zone, we expect the green zone to be the next targeted level. If the market turns around and gets back above the blue zone, 1.1405, we then look for it to head back towards the pink zone. Why? Because that’s what it’s been doing. Let’s not make things up. This is what the market has been doing and that’s what we’re going to expect.
So, as long as it’s under the blue zone today, 1.1375, I would have this expectation that the market will continue the status quo, falling along the red trend line, under the blue zone, heading down to the green zone. So, that gives us a trading expectation. We’ll have a focus for the day. Looking for a setup with lower risk and higher reward to follow it down to the green zone. Is that a guarantee that’s what’s going to happen? No, but at least it gives us a focus for our trading direction. And only if it gets back above the blue zone do we begin looking for the opposite for it to go back up again.
So, buying really isn’t part of the strategy for the day today. More like going short would be part of our strategy for the day, heading back down towards the green zone. One last thing here. Let’s take a trend line. Simple trend line from the lowest low on the chart and just connecting it to this low and this low here. And as we pull it out like that, we could see that even here we have some expectation that if it’s going to follow down into the lows, the green-shaded area, it would also touch into this black trend line.
So, what that does for us is if we have any expectation of potentially going long here, then that becomes a pretty interesting area, 1.1330 along that black trend line and closer to the green zone. So, for buying, low risk, high reward, buying the green zone would be a better idea. Low risk, high reward selling is the blue zone.
Four-hour timeframe real quick before we move on. Here it is. Holding up underneath that blue zone. Again, low risk, high reward. If you’re going to look for low risk on a short, you want to get as close as possible to the resistance, and that would of course be as close as possible to this red line, close as possible to the blue-shaded area. That would be your closest place to take the short, following it down to the green zone as your target.
What’s it going to take for this to go down here? We’re going to need to see the USD break resistance and continue to move on up. We need to see an improvement of the USD for this to continue down towards the green-shaded area today on the EURUSD.
From Forex Traders Daily, this has been your daily analysis with Ross. If you would like to get Ross’ analysis on all the currency pairs he’s watching and all the trades he takes today, join him in his live Trade Room by clicking on the link below. Please leave any comments you have about today’s video in the comment section below.