Transcript of Video
Hello everyone, this is today’s video analysis for February 19, 2019. Today we’re taking a look at the Euro versus the US Dollar [EURUSD] for today’s trade analysis.
We’re starting here on the daily timeframe. We could see that the EURUSD has been basically range-bound for the past five or six days. Take a look down here. Bottom right-hand corner of the chart. There’s a blue box down here. Today included, seven days now we’ve been stuck between the green zone as our resistance zone and the orange zone as our support zone. And really haven’t seen any trending behavior for the past seven days for this currency pair.
Prior to that though, clearly a downtrend. The USD was having a really strong push higher. The EUR was selling off against the USD and sending this lower. From the pink zone all the way up into the 1.1400s down now into the 1.1200s. So, the question is what do we do with this today. I think it’s still kind of up in the air. As long as it sits above the orange zone, I don’t think selling makes a wise decision above the 1.1280-level. That’s the top of the orange zone.
Selling on top of there for the past seven days has been not a really good idea. So, I don’t think we want to do that. I think if we’re going to go short or sell, we want to get as close as possible to 1.1310, 1.1335, the green zone. So, we’re not there. Potentially we look for intraday buying opportunities. If it continues to hold support here as it has the previous six days here on the seventh day, here at 1.1280, 1.1260, may be an opportunity for a long shot for an intraday buy.
We don’t really have significant amount of news today out of the US. We’ve had some news early in the day for the EUR. About 5AM Eastern US time, we had some news for the EUR, but nothing really coming up in the past 12 hours or so during the US trading session. We don’t have any significant US news. Some housing market index news at 10AM, but that’s it really for the US and really nothing for the EUR for the rest of the day either.
So, is there anything to be a motivator, a catalyst for this to break out of this range? I don’t think so. It doesn’t mean it won’t. It just means there’s nothing really scheduled that would be the catalyst. Take a look at the USD index. It’s also kind of stuck. Let’s put them side by side. We see the USD index kind of stuck in that range as well, don’t we? So, you put them side by side and there’s very similar situations.
So, for the time being, as long as the USD is stuck under the green zone as resistance, we see the EURUSD stuck above the orange zone as support. So, if the USD could be successful in its rally and continue the upside, getting above the green zone, then of course on the opposite side we would expect the EURUSD to get under the orange zone. Hasn’t done that yet. In fact, today we see at least at the current moment, 96.85, 95 on the USD index, green zone holding resistance, which of course the opposite of that is holding support on the EURUSD.
For the USD to go higher, again, we don’t have any real significant catalyst for the day today. So, we see the USD holding resistance. EURUSD holding support. If we’re going to go long on the EURUSD, let’s say we intraday buy 1.1280, we want the USD to be as close as possible to that green zone. That way, we at least limit our risk. Our risk right now if we were to buy EURUSD is that our stop loss needs to be underneath the orange zone.
So, to make that stop loss smaller, we don’t bring the stop loss closer. We allow the market to dip closer into the orange zone, reducing our risk, maximizing the potential gain back to the green zone. Now, if we were going to sell, it’d just be the opposite. We would prefer to see the USD down here at the yellow zone, holding as support if we wanted to go short on the EURUSD. Support on the USD to go back up. Resistance green zone to go back down.
Of course if we were going to do that again, our risk is just above the green zone because we know that if it gets above it, that’s the risk in this scenario. So, we don’t want it to break above if we decide to go short on the EURUSD. Again, I think if you’re going to do either one of those things, short the green zone on the EURUSD, buy the orange zone on the EURUSD, you want to see the opposing viewpoint on the USD index at the green zone or at the yellow zone. And right now we’re bouncing off the green zone, which again, means more likely you’d be looking for bounces off the orange zone. The risk is the break of the orange zone, the continuation of the downward trend for the EURUSD.
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