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 October 9, 2017. I hope you had a great weekend and are ready to get started trading this week. In today’s video, I’m going to do a general overview of each of the USD currency pairs in anticipation of this week’s trading and I’m going to highlight some of the key levels that we will be looking for entry and exit opportunities. And as always, be sure to use appropriate risk management strategies in all trade setups throughout the week.
Let’s get started here on the US Dollar versus the Swiss Franc [USDCHF]. For the daily timeframe, we could see a couple of trends here. The black trend was a downtrend. The market broke through it there a couple of weeks ago. Started moving higher. We have this longer blue trend line. Let me zoom out a little bit and you could see where that comes from all the way up here, top left-hand corner of the chart. As it comes back down, we could see that last week, in fact Friday, we came up to touch just underneath that blue trend line and the 0.9840, 0.9850-level, just underneath that blue trend line.
So, very interesting there. So, the blue and the black trend line: historical downtrends, but the red trend line is the direction the market has been going over the past several weeks. Let’s go ahead and zoom it back in now. We could see market moving higher. Went into congestion in the little black box. Went into congestion in the little blue box last week. We broke above it.
Let’s go ahead and zoom it in one more time. Now we’re above what was historical resistance back here, where the blue circle is. Green-shaded area. We’re above that now. So, we’ve broken above resistance. So, that does give us a little bit of an upside bias in the direction of the trend. Now, Friday’s candle gives us a little bit of concern as there was this infusion of sell orders after some news, driving it into the mid-0.9800s and then a sudden reversal.
So, for the day today, and I would say this is typically just going to be an intraday look for this, is that as long as it’s underneath that pink-shaded area, we’re looking at potential intraday resistance. And of course with a bank holiday here in the US and Canada, we may see limited market movement. So, resistance will likely be right around 0.9795, 0.9805, the pink-shaded area. We’re bouncing around in here now.
I do want to point out we’ve seen a similar situation before. Right here, where this green circle is about to be. I just drew this green circle. We saw a similar candle. A nice move higher. A spike. A pullback right into the pink zone. Found support at the pink zone for four days, and then eventually turned back higher again. So, we’ll be watching for a similar situation. The spike higher. The pullback. If the buyers fight back and settle out as support into the green zone, we could be looking for the return of the upside.
Now, on the other side of this, of course we know that this sort of infusion of sell orders could signal a reversal to go back down. So, intraday sells may be in order at the pink zone, targeting the green zone. But a break of the green zone, we’ll likely look for further reversal for the USDCHF this week.
Moving over to the EURUSD. We have two trends here as well. Uptrend. The black trend line. Not too hard to see that. Red trend line has been the current direction the market has been going in for the past few weeks. Now that we’ve seen that, let’s zoom it in a couple of times and we could see coming down. Look at this. Nine days now. For nine days we’ve been holding above this blue-shaded area. 1.1735, 1.1695 as support.
So, as long as it’s above that support, we of course have the opportunity and a potential for some reversal to go back up. And we’ve seen something similar to this before. If you look back here, where this large green circle is on the left-hand side, I’ll just take that one off. The green circle on the left-hand side. We saw a 14-day period where it bounced around between the blue and the green zone. So, clearly back here in time, the best place to go short was all the way back up here at the green-shaded area. Best place to go long was down here at the blue zone, 1.1735 area.
So, if you’re looking for an opportunity for the intraday today with limited news and the bank holiday in the US and Canada today, it could be for a long. A bounce. I don’t think we’re going to have enough energy to break through the blue-shaded area today. 1.1735. Targeting back to the green zone at least, just like it did back here on the left-hand side. If you’re not willing to trade against the current momentum and trend, then the next thing you must see is either a rally to resistance to sell it or the breakdown through the support to continue the downward slide that we’ve seen for the EURUSD over the past few weeks.
Moving over to the GBPUSD. Two different trends here as well. The red trend line. Clear uptrend. Black trend line has been the retracement trend of that red trend line, falling all the way back down here close to the .618 Fibonacci retracement level. Actually a little bit below it of that red trend. Now, today we see the market pulling back a little bit.
I do want to make note of that resistance high back here, where the black circle is. Green-shaded area. Four days finding resistance there. 1.3200, 1.3235. We’re approaching that today as resistance again. So, be cautious on buying close to that green zone because we can see what happened the last time the market was there. Now, I definitely would say that at it reaches there, we’ll watch for resistance and potential signs of infusions of sell orders and for the market to bounce off it as resistance. 1.3200, 1.3235 is that green-shaded area.
The break above it, if it gets above that green zone, we’re likely looking for the turn back higher for the GBPUSD. On the other side, if you’re looking to sell, the green zone. If you’re looking to buy, I think above the green zone is really it. Right now around the blue zone just doesn’t entice me to trade the GBPUSD quite yet.
Let’s move on over to the USDCAD. Obviously historical trend. Downtrend here on the left-hand side. But over the past few weeks, the black trend line has been clearly bullish here for the USDCAD. We’ve had some news over the past few weeks that has given way for this to continue to pressure higher. Green trend bar, Forex Black Book, also giving us some upside pressure.
Zoom it in a little bit. There’s been this pattern. We studied this actually in the Trade Room on Friday. There’s been this pattern within the trend. Let me see if I can kind of outline this for you. You see this area where it went up. In fact, I could put another circle down here that gives you a similar situation, where it found support, it started moving higher, rallied, found support again above the yellow-shaded area, rallied. We saw it somewhat here between the orange-shaded area as well. The orange and green-shaded area, where it rallied and found congestion.
So, we’ve seen this pattern within the trend. I guess the real question is: are we going to see the repetition of that pattern between the green and the pink-shaded area? Are we going to see it continue to find support and rally again towards the pink-shaded area? So, for the day today, I would say as long as it’s above the black trend line, above the green-shaded area, we only focus on buys. 1.2535, 1.2505 is the green zone. So, focus on support. Rallies back to the pink zone as resistance.
If you look back to the left-hand side, not too hard to see that that pink zone is your next resistance high. Back under the green zone, could change the pattern of the trend, which has been these green circles. Congestion. Breakout. Congestion. Breakout. Congestion. Breakout. So, under the green zone, under the black trend line, would change the entire trend pattern, but until it does that, we focus on the upside. In fact, we’re holding a buy that we took on Friday right around the 1.2535-level, looking for it to go up towards the pink zone for the USDCAD.
Moving over to the USDJPY. Well, let’s zoom it out one time. We have this long trend range. We’ve been in this blue box for a long time. Not too hard to see that. Very long. Basically beginning of 2017. The trend pattern: fall, rise, fall, rise, fall, and we’re in the rise phase of the overall longer-term trend pattern. So, very interesting there. The blue box.
Now we zoom it back in. Blue trend line is the rising trend. Look at the black box, top right-hand corner of the trend. It’s just been inside there for quite a while now. We had some buys from last week into the blue-shaded area. Those have been taken out now. So, we’re out with profit, but out of those historical buys that we were in from the blue zone last week. If you got into it again, 112.35, 112.45, the blue-shaded area, you’re into profit. You should be protecting profit.
If anything, if you’re looking to buy, you want to do that as close as possible to the blue zone, 112.45, 112.20. That way, you can limit your risk and have maximum potential profit back to the orange zone. I think if you’re looking to go short on the USDJPY, the only reason I would go short is the break of the blue trend line, break of the blue-shaded area, break underneath the black box, 112.20 or so. Then you look for it to go lower. So, as long as it’s above that blue zone, I think we’re still focused in on the long side for the USDJPY.
Moving on over to the AUDUSD. Two different trends here as well. The blue trend line and then the black trend line. Black trend line is the direction the market has been going in over the past several weeks. Here’s something interesting. Fibonacci. Lowest low. Highest high on the chart. All the way down here, bottom left. Top right. Puts the .382 Fibonacci retracement level right at 0.7820, right in the middle of our yellow zone. And last week, we broke through that .382 Fibonacci retracement level and the yellow-shaded area and historical support back here, where the green circle is in the yellow-shaded area.
So, very interesting there. I think if you’re looking to go short, that’s the best place to do it. 0.7800. That gives you your lowest risk and highest potential reward. I probably would say don’t go short on top of the green-shaded area, where we’re currently finding support. 100-period moving average also sitting here in between the green and yellow zone, but we’re underneath it. Let me zoom in one time. You could see we’re underneath the 100-period moving average. There’s the .382 in the yellow zone. So, any quick spike into the yellow zone I think becomes a sell opportunity in the direction of our current trend. And really only looking for a change of the trend if it gets back above the yellow-shaded area for the AUDUSD this week.
And lastly, moving over to the NZDUSD. We’re currently in a bearish trend. We had an excellent trade from a couple of weeks ago. The sell underneath the 100-period moving average, under the black trend line. We took the sell into the 0.7230, 0.7235-level. Phenomenal profit all the way back down here to the blue zone. I have now closed all of the profit on that trade. If you were holding a long with me, I would say that you want to protect at least as much possible or maybe close the trade.
We’re, again, incidentally, underneath the .618 fib of the blue trend line. Take fib from the bottom to the top of the blue trend line. .618 at 0.7100, and of course the double-zero level. 0.7100 at the purple-shaded area. Zoom it in a little bit. So, I would say that if you’re going to trade the NZDUSD right now, you’re likely looking in the direction of the trend and under the .618 Fibonacci retracement level. You’re looking for shorts on rallies to resistance into that purple zone with lower risk and higher reward.
Right now clearly finding support at the blue zone. That happens to be right at the 0.7065, 0.7045-level. So, reversal potential from the blue zone, back to the purple zone. And of course above the purple zone, changes the trend pattern, which is a bearish trend pattern. And as long as it’s underneath it, we could look for another opportunity to go short close to 0.7100 for the NZDUSD this week.
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.