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 April 12, 2018. Today we’re taking a look at the Euro versus the US Dollar [EURUSD] for today’s trade analysis.
The first thing first. Of course we have been studying in the live Trade Room that the market has been somewhat range-bound most of 2018, this year. Vertical red line on the left-hand side of the chart. That is January 12. So, everything since January 12 been contained inside this large black box between the blue zone at the top and the green zone at the bottom of the black box. And we’ve been contained in there.
We’ve even seen some smaller congestion zones between the top and bottom of that larger range, but we’re in quite a large range here for the EURUSD. No real significant uptrend. No real significant downtrend. If I zoom out one time, you could see we’re at the top of what has been a long-term uptrend going all the way back about a year ago. A little bit more than a year ago. Been a long-term uptrend, but in the past four months, we really haven’t continued that trend. At least three months we haven’t continued that trend. It hasn’t gone up. It hasn’t really turned around and gone down yet. It’s just been bouncing around here.
Let’s go ahead and zoom it back in a couple of times. And now you could see the history here inside the larger range. The smaller black boxes between the pink and the yellow zone show congestion between the yellow zone at resistance, 1.2345, 1.2375, and the pink zone at support, 1.2290, 1.2270. In the past three days, we’ve challenged that resistance, where we have challenged many times before. No breakout, so it never got above and stayed above the yellow-shaded area, and now we see it turning back lower again.
Momentum carrying through today, now pressuring it back lower. Of course the next support is the pink-shaded area not too far down into the 1.2290-level. Blue trend line. That long-term trend that we noticed from about a year ago sits just underneath the market into the 1.2290, 1.2270, pink-shaded area as well. So, that’s an interesting area. Of course clearly if it breaks underneath that, we might look for it to pressure down to the green zone. Why? Because that’s what it’s done all year long. Above the green zone is support.
And of course if it can ever break through 1.2375, we would look for – look at the blue circles back here on the left-hand side. At minimum, to the orange-shaded area, if not the blue zone at the top of the chart. So, yellow zone pretty much our area that we want to focus our attention on so far for the past three days. Past two days and today being the third day into 1.2345, 1.2375. So, as long as it’s underneath it, it provides some clue to resistance as it has before. It didn’t break above it, so we look for short opportunities underneath the yellow-shaded area, targeting back down to the pink zone or lower.
The only real reason to go long and buy the EURUSD today would be one of two things. It finds support again at the pink-shaded area as it has many times before or breaks above the yellow-shaded area. So, for the time being, coming off the yellow zone, I believe today is a better short than a buy on the EURUSD today. Forex Black Book is red. That also gives us a clue that there’s more of a bearish momentum than a bullish momentum.
Four-hour timeframe doesn’t really change it. You could see the market holding underneath. The past couple of days underneath that yellow zone. We do, by the way, have a bearish signal for the Forex Black Book, but we’re already falling off the yellow zone right now. So, if I was going to go short here on the EURUSD, the first thing I would actually like to see would be that it maybe makes a little bit of a rally, holds back to the yellow zone as resistance, and then we look for it to fall back down to the pink zone or lower.
So, sellers are waiting for a rally back to provide lower risk and higher reward. Your risk right now is that it gets above the yellow-shaded area. So, if your stop loss is above the yellow zone, you make that stop loss smaller not by bringing it closer, but allowing the market to drift back to the yellow zone before going short back down to the pink zone, or as I said, maybe even a turn all the way back down to the green zone at the very bottom of the chart. But again, lower risk happens when you sell at a higher point, not at a lower point.
So, that’s what I’m watching for today. And of course, again, the risk is it breaks above the yellow zone and goes higher. Stop loss above and we’ll look to get out if it breaks above there. Maybe even flip our position back to a buy side for the EURUSD today.
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.