Transcript of Video
Hello everyone, this is today’s video analysis for January 2, 2019. Today we’re going to begin our new year taking a looking at the Euro versus the US Dollar [EURUSD] for today’s trade analysis.
Starting here on the daily timeframe, we could see that this currency pair has been in a downtrend for quite a while. Much of 2018 was a downtrend. We started all the way at the top of the blue trend line back here. Let me get the crosshair. Started much of 2018. Back in February, we matched the high up here at the top of the chart into the 1.2565, 1.2570 area at the top of the chart. Moved all the way down to the bottom of the chart. Back in November, we saw the low on November 12 down here towards the 1.1200-level.
So, quite a long-term downtrend. In the past couple of weeks, as we approached the end of the year, we saw the market go into a period of congestion, range-bound, and it started kind of drifting a little bit higher back into the pink-shaded area here into the mid-1.1400s. What’s interesting about that area is the 100-period simple moving average. That’s the green line coming into the chart coming into that same area.
So, for the past week and a half or so, we’ve been tucked up underneath that 100-period moving average and the long-term trend line for 2018, the blue trend line. Both of them showing resistance into that mid-1.1400s. 1.1400 to 1.1480 showing resistance. The pink-shaded area here for the past week and a half or so. Now we see today the market taking a little bit of a down turn for the EURUSD, which is of course the USD having a decent day so far. USD coming back a little bit, sending the EURUSD back down off of that resistance.
Zooming it in, you could see that 100-period simple moving average here on the daily timeframe and the trend line coming into the 1.1480-level and finding resistance. Now settling down into support, 1.1405, 1.1375, the blue-shaded area. So, the real question is we don’t have a lot of news on the calendar yet today. For the year we don’t have any news on the calendar so far. So, the question is will this bullish momentum for the USD continue and will we see the trend for 2019 start to establish.
Will it return to the downtrend, staying underneath the blue trend line, staying underneath the moving average? Will it return to the downtrend or is this just a fake out and we’re going to start to see support build back in and we’re going to see a new uptrend? I don’t think that question has really been answered yet. We, again, could delineate this a little bit. Put a little bit of a black trend line right here and we could see that support. Still the potential of support here into the blue zone and that little short black trend line is still there.
So, I don’t think we can really truthfully say we should sell this yet today, sitting on top of this blue zone because we’re sitting into support. Maybe a break of that blue zone gives us an opportunity to sell or maybe a retest of the pink zone becomes an opportunity to go short for the EURUSD here on the first couple of days of this year. The other reason I think to go long. Maybe we watch for support here into the blue-shaded area for the EUR. Maybe some support here into 1.1400 and a hold above it gives you an opportunity to go long towards the pink zone, or again, probably the best news for breaking and going higher for the EURUSD would be the break of 1.1480, the 100-period moving average, and the trend line.
So, I don’t think there’s really any clear answer to our trend question yet for the year. Will it turn into an uptrend? Will it return to the downtrend? That’s not really something we can answer quite yet. I think we really can’t answer that until we break the black trend line or the blue trend line. So, for the time being, for the day today, watching support here into the blue zone. I don’t think this is a good time to go short EURUSD today. Potentially watching for some support over the next day or so into this 1.1400-level maybe gives you an opportunity to rally back to the pink zone or potentially the return of an uptrend for the EURUSD over the next coming days.
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.