Transcript of Video
Hello everyone, this is today’s video analysis for November 2, 2018. Today we’re taking a look at the Euro versus the US Dollar [EURUSD] for today’s trade analysis.
Now, it’s important for me to mention before we begin our chart analysis that of course at 8:30AM Eastern US time, about 45 minutes from the recording of this video, we have significant news out of the US and Canada. Specifically, the US. We have non-farm payrolls popping up at 8:30AM Eastern US time. So, that could change everything I’m talking about here in this analysis.
If it’s significantly positive or negative, would have a potentially significant impact on volatility and the support and resistance levels that we’re talking about during this video. Anyway. We come here to the daily timeframe. We could see that over the past two days, we’ve seen a pullback here. The USD selling off the past couple of days, sending the EURUSD higher, and we could see it pressuring higher from the lows. 1.1310, the bottom of the green zone. We’ve seen that low before on the left-hand side. Became a reversal point for the EURUSD, sending it all the way back up into the 1.1800s.
Then it came back down into the same green-shaded area and bouncing off of it again today. The question of course is will the news be positive or negative for the US and how will the market interpret it. Even if it’s positive or negative, it doesn’t necessarily mean that’s what the market is going to do, sell off or buy the USD. So, we need to be watchful for evidence of that. Right now the market is clearly testing into a shorter-term trend line, the black trend line coming down from the top.
It’s testing into what was historical support. Now acting as resistance. The pink-shaded area. 1.1445, 1.1475. So, really we have two potential outcomes here. Either we get positive motivation for the USD. It finds resistance at the pink zone and goes back down, challenging the lows on the chart. The other side of this is we get negative news out of the USD and it breaks through this pink zone and goes higher and continues the rising move that we see right now.
I’m sure that there were a lot of folks that right here in this period, right in the middle of the black trend line, thought this was it. It was turning around and going back up again, and then it turned around and went back down. So, again, don’t get caught up in the hype of the past couple of days until we see some more evidence that it’s going to continue this rising trend above this pink-shaded area.
So, we’re challenging this zone. Two potential outcomes today at the news. One is it breaks it to go higher. One is it bounces off of it to go back down and challenge the low. So, we need to be watchful. Current support: the blue-shaded area, 1.1405, 1.1380. That would be the next support on the way back down. So, we get positive motivation for the USD. It may challenge that blue zone. A break there, of course heads back down to the green zone. Above the pink zone, our next resistance happens to be 1.1530, 1.1560. That’s the orange-shaded area that sits right here.
So, we definitely want to watch what’s going to happen around this pink zone. Take a look. Again, back here on the left-hand side. Look at the significant support we found here. So, we know with fact that this isn’t anything we can make up. That this is a decision zone for the market. Back here, the decisions were exit, sells, enters, and buys. We have to be watchful for what’s going to happen today.
Take it down to the four-hour timeframe. Really doesn’t change any of that. We just see that resistance happening here at the pink-shaded area. Again, not too hard to figure that out prior to our news. It’s really about what’s going to happen here. Do we see the market break out and get above the pink-shaded area? That would increase our confidence that it’s going to go higher. Do we see a sudden infusion of sell orders from here, leaving let’s say an inverted hammer candlestick or a bearish engulfing candle? That would give us a clue to a pull back down.
Now, here’s the risk of trading around this news, is it could jump up, spike above the pink zone, fool everybody into buying it above 1.1475, and then turn right back around. We’ve seen that before, haven’t we? If you’ve traded for any amount of time around non-farm payrolls, you’ve seen that before, where it could jump up, fool you into buying it, and then turn right back around and go down. So, be careful of that.
We also have seen where it suddenly dips down, finds support at the blue zone, everybody sells it and then it turns around and goes back up. So, be watchful for your price action around these decision zones today for 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.