Forex Trading – Forex Update: Watching for News then Potential Sell on EURUSD
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Next, moving over to the Euro versus the US Dollar [EURUSD]. We’ve had a couple of different trends to focus in on here for the EURUSD. First off, the previous uptrend, the red trend line. It was moving higher. Moved all the way to the top of our range, into the 1.1500s. Then it started moving lower along the green trend line over the past several months. Then, over the past few weeks, we’ve seen a reversal once again, pushing back above the green trend line and just underneath that red trend line.
So, let’s go ahead and zoom it in here on the daily timeframe. Over the past few days, we were kind of stuck inside this black box, finding support at the bottom. 1.1305 to 1.1285. We see support at the yellow-shaded area today and yesterday into 1.1250. So, as long as it stays underneath that orange zone, I think there’s a possibility we take a turn back down to the yellow zone or even down to the pink zone and a return of the downtrend.
Now, the only risk to that is that it breaks back above this orange-shaded area, 1.1305, and starts going back up in the direction of the long-term uptrend. At 8:30AM Eastern US time, about 40 minutes from the recording of this video, we have some news out of the US that could affect this currency pair, so it might be prudent to wait until after that news, see how that affects the market, and then look for another opportunity. If it breaks through the orange zone, again, I think we’re looking for the rise, at least back to the blue-shaded area up here into the mid-1.1300s. If it’s negative news for the US, that’s what would cause that. It would cause it to go up.
Now, positive news out of the US, we look for continued resistance into the 1.1285-level and the market to turn back down into the mid to low-1.1200s. That’s down here towards the yellow-shaded area, and by the way, the 100-period moving average sits just underneath there as well.
Four-hour timeframe. We have seen several candles open and close underneath that orange zone, giving some confidence in resistance at 1.1285. So, your risk in this trade is above the orange zone. You just don’t want it to break above there. So, if you decide to go short and sell the EURUSD, put your stop loss just above the orange zone, because if it gets back above, if news is negative for the US, we would likely look for the turn higher again. Positive news, finds resistance, starts working its way back down for the EURUSD today.
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