Transcript of Video
Hello everyone, this is today’s video analysis for December 19, 2018. Today we’re looking at the Euro versus the US Dollar [EURUSD] for today’s trade analysis.
Before I begin the analysis today, important to remember that we have significant news today on the calendar. The past couple of days very light on the news calendar. Today more significant and higher impact news. We’ve already seen earlier today some news out of the UK. CPI and other pieces of news coming out. Just in a short while we have some news out of Canada popping up with CPI and some other pieces of data. But very important of course is 2PM Eastern US time today. We have FOMC and the fed making their interest rate news and announcements.
So, we definitely want to make sure that we’re using appropriate risk strategies to limit the impact to our trading account if the market does something we don’t expect it to do. And we have a lot of things that are impacting that. We may see volatility based on the news calendar. We also need to understand that we’re going into the holiday trading environment. Lower liquidities and maybe unexpected movement happens because of that.
So, appropriate risk strategies is going to be the best way for you to survive through this holiday trading, news trading environment. So, very important to consider that before entering any trades during this period of time.
Anyways, let’s come over here to the EURUSD daily timeframe. Really this currency pair has been in a fairly tight range. The blue-shaded area, 1.1405, 1.1375, and the green zone, 1.1330, 1.1310. You could see the black box down here. Somewhat of a consolidating pattern inside the red trend lines as the triangle. Rising lows. Falling highs. But really the blue and the green zone outlining the top and bottom resistance and support between those areas. You could see currently we are at the resistance right around the 1.1400-level.
So, we know that there’s really only two things that we will look to consider today. Either the news causes the USD to rally or the USD falls. One of those two things is going to happen, causing the EURUSD to move. A fall of the USD. Selloff. A quick selloff of the USD is going to send this currency pair, breaking through 1.1405, and likely challenging at least the pink zone, if not higher. The pink zone of course 1.1450, 1.1480. We also have the 100-period moving average coming close to that and the longer-term blue trend line. If I zoom out one time, you could see where that long-term blue trend line comes from the top of the chart.
So, we come close to that of course or break it if the USD sells off after today’s news. The other side of that. If the USD finds strength in sentiment after the news, we could see this bounce off the blue zone and go back down at minimum to the green zone. Probably lower than that also if it continues to break through that green-shaded area. So, some interesting things here for the EURUSD, but mainly focused in on this blue zone for the day today. What’s going to happen here? Will it break? Will it bounce? The past couple of weeks, we’ve seen resistance here. False breakouts above there.
Let’s zoom it in one more time. A couple of times we’ve seen the market get above this blue zone, where it challenged above it. Couldn’t sustain the hold. Turned around. Challenged above it here. Couldn’t sustain a hold. Turned around. Here we are again of course right here into the blue zone. I’d love to be able to say with 100 percent confidence I know exactly what’s going to happen today as news and holiday environment takes hold, but I just can’t do that.
But what I will be watching for are a couple of things. Either the market is going to get above this blue zone for the first time in quite a long time. We’re either going to see it get above here, likely looking for a full candle body above here to increase our confidence that it’s a real breakout and not a false breakout. We need to see a full body above there. The other side of it is we will watch for clues to reversal. A sudden infusion of sell orders after the news.
If the sentiment is positive for the USD, we’ll look for clues to that. Bearish engulfing candle. Shooting star. Inverted hammer. Whatever you want to call it, we’d look for clues and evidence to a sudden infusion of selling pressure or really a positive movement for the USD. So, one of these two things is going to give us our strongest expectation for the EURUSD. Either it finally gets above or it suddenly reverses.
Take it down to the four-hour timeframe. It’s not really going to help us out too much more other than the fact that it’s the same thing. Either we’re looking for that sudden infusion of sell orders to get back underneath the blue zone. Hey, by the way, that kind of happened back here right in this area right here, where we saw the sudden infusion of sellers. It was a little bit above it. Sudden infusion of sellers came up, found resistance, and went down to the green zone. By the way, we sold it in the live Trade Room right here at 1.1375.
But that’s what’s we’re looking for. Either it suddenly sells off, gets back in there, or we finally get a good breakout above here, where it stays above the blue zone probably on the daily timeframe. But until we get those types of price actions, I think we’re just guessing at this point what’s going to happen. So, watch the news. Watch for the sentiment after the news. Keep in mind holiday environment, but be careful with your trading and I hope that one of these two price actions happen to give us confidence with a new trading opportunity on the EURUSD this week.
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.