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 November 14, 2017. Today we’re going to be taking a look at the Euro versus the US Dollar [EURUSD] for today’s trade analysis.
I’m starting on a little bit of a different chart today because I want to show you the structure of the trend that we’ve been studying in the live Trade Room. First things first, the previous uptrend. The gold trend line or even the longer-term move of that trend all the way from the lowest low to the highest high.
I’ve taken Fibonacci from the low to the high. That actually puts .236 Fibonacci retracement level at 1.1678, so right about where this red line is. Of course it was in an uptrend along the yellow trend line and then started moving lower along the black trend line. So, we started seeing lower highs and lower lows along the black trend line. What I’ve highlighted with the green line is what I’m interpreting to be the head of a head and shoulders pattern. The blue line being the shoulder level, where we see resistance on the left and resistance on the right, and the red line being the bottom of that shoulder level, where we see support here on the left right around that .236 and support here on the right, right around that .236 Fibonacci retracement level as well.
Over the past couple of weeks, we’ve seen the market break underneath the red line, break underneath the .236, and break underneath the 100-period simple moving average here on the daily chart. That’s the green line. So, today we see the market coming up into that red line, which is the bottom of the shoulder level or neck level if you will. We see it coming up into the black trend line, which has been a bearish trend for the past several weeks, and we see it coming back into that 100-period moving average.
So, there’s a lot of things converging together, stacking on top of each other if you will to tell us that there’s potential resistance here and the potential for the market to turn around and go back down. I know it’s been going up today, but the potential is for these technical indicators to short us a potential reversal point to go back down.
We begin to zoom it in a little bit and you could see the market touching right into that 100-period moving average and the black trend line. It’s a little bit above the moving average, but as I described yesterday in the live Trade Room, there’s a little bit of a zone if you will. When we look at our typical chart, you’ll see there’s a little bit of a zone in this area right here that we are looking for resistance, where you could see support here and support here, where the two black X’s are, and that comes right up underneath or into that 100-period moving average and the black trend line.
So, anywhere within that blue area just on top of the red line is what we were discussing yesterday as a potential entry point for a short. Now, obviously today we’re seeing the bulls are pressuring it a little bit higher. We do have some news coming up for the US. We’ll see if that’s positive or negative, but again, we’re right in there, where all of this information converges together. There’s really only one of two things that’s going to happen here. Either the sellers come back in. It honors the head and shoulders. It breaks back under the red line and we start seeing it go down as we’ve been expecting, or the market changes its mind, the pattern fails, it’s invalidated if you will, it breaks above the black trend line, and goes higher.
So, this is the area that we want to pay attention to for the EURUSD today. Let’s take it over to our other chart here. And again, there’s the black trend line, the moving average, the blue-shaded area. We begin to zoom it in and right now we don’t yet from the low-1.1700s. 1.1735 is actually the top of the blue-shaded area and the moving average, if I put my cursor right on it, is at 1.1732. So, we’re right into the top.
So, we don’t yet see any bearish price action to indicate that sellers are even here. Sell orders are even here yet. It doesn’t mean there aren’t. It’s just we haven’t seen them dive into the market. No price action. So, that’s what I’m looking for. I’m looking for some indication that there are actually sell orders here to tell us that it’s time to go ahead and dive into the short. And of course the little red line there represents a stop loss. If we decide to go short into 1.1735, 1.1740, our stop loss goes above that area because we’ve already described this.
If it breaks through the moving average, the trend line, and shatters the head and shoulder level, then we would look for it to go higher. We’re looking for it to find resistance, start workings its way back lower in the direction of that head and shoulders pattern. Is it out of the question that after a significant push higher we could see it go down? No, that’s exactly what happened back here. You could see it right here, where this little red line is, where it would move from the blue zone all the way up to the purple zone and then it hit the purple zone and started this next phase of a downtrend and even made three significant lower highs right here along the black trend line.
So, I think we’re in that area, where we’re going to begin looking for new short opportunities. Just like it would’ve been here at the purple zone the first time it came into that area and it found resistance and fell off, came up again, found resistance, fell off, came up into the green zone, found resistance and fell off. I think this blue zone is where we begin looking for those opportunities to go short within the head and shoulders pattern, under the black trend line, under the moving average. We’re looking for price action that indicates sell orders are present here 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.