Transcript of Video
From Forex Traders Daily, this is your daily analysis with Ross Mullins, live from Richmond, Virginia.
Hello everyone, this is today’s video analysis for July 10, 2018. Today we’re taking a look at the Euro versus the US Dollar [EURUSD] for today’s trade analysis.
Today we see here on the daily timeframe the EURUSD making a dip back lower again. For the past week and a half or so, we’ve been on the rise for the EURUSD, pressuring from the significant lows down here into the 1.1500s. The orange-shaded area at the very bottom of the chart. Been rising from there. Pushing to the yellow zone. Breaking that. Pushing to the blue zone. And in the past couple of days, we broke through the blue-shaded area. 1.1695, 1.1725.
So, a significant breakout above that blue zone. Look back to the left. I have it circled where historically we see some resistance. Just to the right of that, it was support into that blue zone. Inside the black box it was resistance. So, we can see significantly over the past couple of months here that the market has found support and resistance into this blue zone between 1.1695 and 1.1725. So, we know it’s a significant decision area.
Drew a trend line from the last two resistance highs. You could see the high here. Top of the red trend line. High in the middle of the red trend line. And currently the market is just above that red trend line. So, the question is: are we going to see it stay above the blue support zone, red trend line? By the way, .618 fib of the last little leg down right around 1.1720. But are we going to see it stay above it and continue this rise that’s been happening for the past few days or weeks, or is it going to turn back around and go back in the other direction?
So, we need to watch this blue zone for our trade setups. Let’s go ahead and zoom it in here a little bit. So, you could see it pushing through. Now sitting and dipping its toes back into the support zone. Again, there’s really only two things that we need to figure out here. One is what we’ve just mentioned. It stays above the blue zone. Continues to rise. Goes back to the purple zone just like it did over on the left-hand side of the chart.
The second potential scenario here is that it gets back under the blue zone. Back under the .618 fib. Back under the red trend line and we start to see it head back lower again. We start to see it go back down towards the yellow zone. Of course a lot of this will depend on the USD. A lot of this being driven by the USD rising and falling over the past few days. You take it over here to the dollar index and you can see just the exact opposite, where we dipped under the green zone and now rallying back into the green zone, where we see historical support now acting as resistance just right around the 94-level.
So, the question is: will the USD continue the rally and comeback, or will it find resistance and go back down? Just the opposite of everything we just spoke about here on the EURUSD. Interesting though is this rise and let’s just take this black trend line. Put it on this low and here. So, again, that kind of confirms it for us that the blue zone is our decision zone. Staying above it, we look for the continued rise. Below it, we look for the fall.
So, we’re looking for the trade setups right here into the blue-shaded area. Four-hour timeframe. As we get down here, of course we see the market dipping its toes back into the blue-shaded area. Again, there’s that black trend line that I just drew in there representing the rising price action that we’ve seen over the past few weeks here for the EURUSD. So, again, it doesn’t change it. We’re just looking for the setup here into and around that blue-shaded area.
I don’t think we want to sell right now. That would be the first piece of analysis that I would have. I don’t think we want to sell. The only reason I would go short is that this gets back underneath the blue zone. We need it to get back underneath there. If it gets underneath there, sure. Then we look for it to go back down towards the yellow zone. So, not really confident in that yet.
I’m actually more confident in looking for the sudden rally. If we get some sudden infusion of buy orders, I’m just going to change this to blue to represent a bullish movement on my chart. If I look at it like this, we’re looking for one of two things in these two supposed movements are here. We look for the breakout underneath. That signals the move lower. Holding inside and above and a sudden infusion of buy orders, leaving maybe a hammer candlestick, bullish engulfing candle, something like that implies that we’re looking for it to go back higher.
So, we’re really looking for one of those two things to happen 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.