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 June 7, 2018. Today we’re taking a look at the Euro versus the US Dollar [EURUSD] for today’s trade analysis.
We’re starting here on the daily timeframe. I want to go back in time a little bit first. We look back where these circles are on the chart. The blue and the black circles. Left-hand side of the chart. We see historical resistance around the 1.1820, 1.1855-level. We’ve seen a lot of it. Many days. Daily candlesticks. Daily timeframes. Finding resistance around this purple zone.
You see it back here all the way back in July and August of 2017. You see it again in October of 2017. November. And even into December. A lot of resistance there. Even some support because if you look between the circles, the top side of that purple zone, we saw support here and support here. So, we’ve seen a lot of historical price action. In other words, trading decisions made around 1.1820, 1.1855. And that’s what I’m trying to highlight here with these colored zones.
Where has the market previously made its trading decisions to buy, sell, enter or exit. The circles indicating resistance at the purple zone indicate those periods where buyers exited and sellers entered, trying to drive it back down. And it happened multiple times back in time. And even on top of that purple zone, it was the opposite. It was trading decisions of sellers exiting and buyers entering. That creates that boundary of support.
So, there’s multiple instances of trading decisions by the market being made at this purple zone. So, we point that out because the current market is right there into that same area. Historical decision zones often repeat themselves into the future and we look to that to happen again here in between 1.1820, 1.1855.
Zoom it in a little bit here. And you could see the current market coming right up here into this purple zone. A pretty significant pullback, retracement correction for the EURUSD. It’s been in a significant downtrend and now we see it pulling back all the way into the 1.1800s again for the EURUSD.
Something interesting here also. Fibonacci from the high of the black trend line right up here into the 1.2415 or so level. High of the black trend line to the lowest low on the chart. We find the .382 Fibonacci retracement level sitting at 1.185. Happens to be the top of our purple-shaded area. So, for today, the expectation is we’ll look for resistance and reversal as long as It’s under the purple-shaded area. It has to break through it if we’re going to see any continuation higher towards the orange zone. But for right now, as long as it’s under here, we’re looking for clues, price action, evidence that it’s going to find resistance, reverse, go back down.
Target of course would be the blue zone. Why would the blue zone be the target? Well, first that’s the .236 fib of that same trend range, but also look back here to the black circle. That was our support. So, if it finds resistance here at the purple zone, we expect at minimum it goes back to the blue zone, if not to lower levels down here towards the bottom of the chart. The only reason we expect a continuation of the upside is that it breaks through here.
Why? Because that’s what happened over here. Look at the black circle. Found resistance. Resistance. Finally broke through it and then went higher, and that’s where I’m looking at right here, where the blue circle is on top of the black circle. It was bouncing around here. Finally got above it and then went higher. So, if you look at those as examples, as long as it’s under the purple zone, we look for resistance. Only if it breaks through it do we expect it to go higher to the next level zone, which would be the orange-shaded area.
Take it down to the four-hour timeframe. So, one of the things that we’re looking for is evidence. Price action evidence of resistance, yes, but also reversal. I would suspect we need to see some sort of infusion of sell orders. Could be a bearish engulfing candle. Could be an inverted hammer or shooting star type candlestick. Something that tells us that sellers are present here and are likely to drive it back down again for the EURUSD today.
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.