Transcript of Video
Hello everyone, this is today’s video analysis for October 11, 2018. Today we’re looking at the Euro versus the US Dollar [EURUSD] for today’s trade analysis.
Starting here on the daily timeframe, really want to go back all the way back to May 23rd. Vertical red line left-hand side of the chart. You could see overall quite a bit of price action this year since May inside this large black box between the orange, yellow, blue, and purple-shaded areas that you see here towards the bottom of the chart.
You see all these circles representing periods of congestion, support, resistance, ranging in these periods between here. Most importantly of course, the blue circles at the bottom because that’s where we are currently, challenging that orange-shaded area. Two periods now where the market has been underneath that orange zone in the middle of the chart, where the market dipped all the way down into the 1.1300-level. Came back up. Got right back above the orange zone and started bouncing around and went back up.
In the recent two weeks, we have seen the market get underneath 1.1535, the orange zone. Bounce around just between the orange zone and the pink zone, and now we see a little bit of a difference today as the market pushes right back above 1.1535, 1.1560, the orange-shaded area.
So, history shows stats, statistics, fact – all of that shows that above the orange-shaded area this becomes support. That’s fact. That’s history. We can’t change that. So, above 1.1535, 1.1560, we’re now looking at it challenging above there and potentially becoming support and a rally back to the yellow zone or even higher here for the EURUSD.
Let’s go ahead and zoom it in one time now that we know all of that and begin looking at this orange zone a little bit deeper. 1.1560, 1.1535. You could see, again, bouncing around underneath it in this little black box down here. And today we see a change and the market gets right back above it.
So, for the day today, as long as we’re above that orange zone, there’s potential that this becomes support like history and we see the market rally and continue to pressure back up here towards the yellow-shaded area. Yellow zone happens to be 1.1620, 1.1645. Interesting enough, that’s where the 100-period simple moving average lives as well, right there into that yellow zone.
Let’s take one simple fib from the highest high right here to the current low. .382 sits at 1.1578, right about where the current market is challenging right now. Above there, 50 percent of that little down leg sits right here at 1.1620, 1.1630, right into the bottom of the yellow zone. So, I think it’s pretty easy and safe to say that as long as the bulls stay in control today, it stays above the orange zone. We look to target the yellow zone.
The risk now for anybody buying is that it turns around and goes back down, underneath 1.1535 and heads back down towards the pink zone, which is 1.1475. That’s the risk. Buying it, risk is it gets back underneath it. Selling it, I don’t think there’s a real good reason to sell it above the orange zone. History doesn’t show that that’s a good idea. Just really look at this one right here. The blue circle that’s in the middle when it was below and came back up and got back above began using the orange zone as support and rallied all the way to the blue zone.
So, this is a pretty good example of what we’re looking at today, isn’t it? Getting back above the orange zone, dipping. Sitting on top of this support and then rallying again. So, that’s the reason I say don’t sell it right now. Unless it gets back underneath the orange zone, not a really good opportunity to sell it.
What we’re going to look for really is that the USD continues to selloff as it has in the past 24 hours. If it does, we look for this to continue back up here towards the yellow zone.
Take it down to the four-hour timeframe. We’ll be talking about this more in the Trade Room today. What are some of the price action evidences that we will look for, for buying this? Do we just randomly buy it or do we look for low risk, high reward trade setups to give us confidence in buying this currency pair above the orange-shaded area? So, that’s really what we’ll talk about deeply in the live Trade Room today. How do we get into this? Why do we get into it? And how could we profit from this move that the EURUSD is taking above the orange zone 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.