Transcript of Video
Hello everyone, this is today’s video analysis for December 3, 2018. Today we’re looking at the Euro versus the US Dollar [EURUSD] for today’s trade analysis.
We’re looking here at the daily timeframe. A couple interesting things to talk about. Let me zoom out one time. We could see long-term, going back several months, we have been in a downtrend. Really since the beginning of 2018, we capped out up here January, February at the high of the chart, and have been moving down ever since. So, pretty long-term downtrend highlighted by the blue trend line.
Zoom it back in one more time. The black trend line shows the recent momentum and that sentiment of the EURUSD has been bearish again. USD has been rising against the EUR and we’ve seen it pressuring and making a new low all the way down here towards the 1.1200-level at the very bottom of the chart. And then we made a little bit of a rebound back above that same black trend line. Then we sat down on top of it last week and now just kind of pressuring back up and down a couple of times over the past few days.
The question is are we going to continue to find support at the bottom of the downtrend and are we going to see some reversal here for the EUR. Will it start to turn back higher? What that’s going to entail is we’re going to need to see the USD fall. A stronger downtrend. Stronger pullback for the USD. Weakening of USD. If that happens, we’ll likely see the EURUSD start to pressure back higher again.
If the USD rallies again and we see a break of the highs on the USD, a new surge of strength for the USD, we’ll likely see this break down through the orange zone and the new low being made for the EURUSD. So, some interesting dynamics there. Technically, we are at support. The green-shaded area, 1.1310, 1.1335 highlighted in green here. Look back in time. You see the blue circles here.
Twice the market found significant support here. Bounce back up over here on the left. Significant bounce higher. We did get below it a couple of weeks ago, pressuring that new low. Bounce back up. Challenged it last week. Bounced back up. Now here we are again, sitting on top of the 1.1310, 1.1335-level.
So, let’s go ahead and zoom it in one more time. There it is there. You could see it kind of consolidating here really. You could see the falling highs and some rising lows. So, we see somewhat of a triangle pattern setting up here for the EURUSD. So, what that’s telling us is the tighter and tighter it gets inside that pattern, we either look for the breakout to the topside or we look for the breakout to the bottom side and a new low to be made. So, we’re looking at the blue and the green zone intently as the top and bottom of this contracting pattern that we see.
Lower highs, higher lows. Not really part of an uptrend or a downtrend, right? Uptrend would have higher lows and higher highs. A downtrend: lower highs and lower lows. Well, here we see lower highs and higher lows, so it’s kind of a contracting and constricting pattern, waiting for some sort of breakout really for the USD. Maybe the EUR would be sending this in a particular direction, but I think right now, as we look at this and we’ll look at it in the daily Trade Room later today, USD movement often predicts quite accurately the movement we’ll see here on the EURUSD in an opposite form.
Whatever the USD does, this does the exact opposite. Anyway. We’re seeing it contracted here. Today we are at support, and let’s get tighter with this, looking at the green-shaded area. I don’t think you want to sell today. Selling within this pattern and at support at the green-shaded area just doesn’t make sense to me. I don’t think selling here at the bottom of the pattern is a great idea for the day today.
That may produce an opportunity to buy it into the 1.1335, 1.1310-level. Watch for clues and evidence on smaller timeframes like the four-hour to tell you that the buyers are stepping back in and going to send it back up at least to the blue zone. Blue zone would be your first targeted resistance. Obviously top of our little triangle pattern that we have here. Break above that, 1.1400, would look for it likely to challenge a little bit higher.
Let’s take it on down to the four-hour timeframe. And as we get down here, take a look at what’s been happening since market opened. We did get a little bit of a gap higher. The market is coming down pretty close to satisfying that gap there already. As we see the market pressure back down on the current candlestick, pressuring back down very close to the close of last week and the open of this week back down into there.
So, again, the green zone is our main area to focus in on. Above it, we may see the rally higher today. Don’t sell on top of the green zone. Maybe. I suppose if you’re looking for an intraday quick in and out underneath 1.1310, may see it challenge back down here to the orange zone or lower. 1.1280 is the top of the orange zone. So, the only real good reason to sell today would be back at the blue zone or under the green zone. More likely, above the green zone, there may be an opportunity for a long shot on the EURUSD today.
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.