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 13, 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 US 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 strategies in all trade setups.
Let’s go ahead and start here on the USDCHF. Looking at the daily timeframe, of course we have two different trends. The previous downtrend. The blue trend line. Found the baseline down here into the mid-0.9400s and we’ve been moving up ever since. The red trend line shows we’re currently still in an uptrend. Yes, last week we saw a little bit of a pullback for the USD, but overall we are still in an uptrend and I don’t think we want to discount that.
The pattern of the trend was a rise. Some congestion here in the black box just ahead of the blue trend line. Broke through that and we’ve seen a rise and now we’re in a period of congestion again up here at the top of the red trend line. Blue box. 0.9940, 0.9960 is the bottom of the box. The blue-shaded area. 1.0000, 1.0020 is the pink zone at the top of the blue box.
Let’s go ahead and zoom it in on that a little bit and you could see the market over the past couple of weeks has just been bouncing around in here. So, the question of the day will be, or really the week: will we see the return of the uptrend or a breakdown and a reversal here for this currency pair? I don’t think we can call it either way at the current moment. Of course right now 0.9940 holding as our support. As long as it’s above that and you look at the red trend line, I think we have to assume for the time being that there is still support and the possibility of taking another run at 1.0000, the high point of the trend here. And of course a break above that pink-shaded area, we’ll see a continuation of the uptrend.
Now, all of that would change of course if we see the breakdown of the blue zone. And when I say a breakdown, we need to see a clear single candle body underneath there at 0.9940 and the red trend line. It hasn’t done that, so only if it does that do we begin looking for the market to make some sort of run lower.
Let’s take it down to the four-hour timeframe. So, there’s that blue box again that you could see, and over the past couple of weeks we’ve seen quite a bit of support into there. Look at this interesting area over here on the right-hand side. A significant fall off last week. A little bit of a rally. Now we’re trying to push back into it. Of course as I said a minute ago, I don’t think we can call this a downtrend or even a breakout unless it’s satisfactorily underneath 0.9940, which it hasn’t been for quite some time now.
So, if I was focusing in on something, I’m looking for support. I’m looking for potential signs of reversal to go back up towards 1.0000, the pink zone, or higher in the direction of the longer-term trend. And only focused on the other side, going short, if it breaks through the red trend line and the blue-shaded area.
Let’s take it on over here to the EURUSD. Of course this pair we have two different trends as well. The blue trend line, uptrend. Black trend line, downtrend. We’ve been studying and trading pretty heavily the downtrend pattern that we’ve seen here for the EURUSD over the past few weeks and I don’t think that’s changing yet. The black trend line. The head and shoulders pattern.
We’ve been studying the head and shoulders pattern here, and let me just switch over to a different chart real quick and you could see that pattern. I’ve zoomed out, so you don’t see candle bodies, but you could see the structure of the trend pattern. The rise. The green line at the top. The blue line as the shoulders. The red line as the neck level. We’re underneath the 100-period moving average. We’re underneath the .236 fib of the long-term uptrend. All of that tells me we’re still staying short here for the EURUSD as long as it’s underneath all of that right into the upper-1.1600s. 1.1680, even up towards 1.1720, we’re looking for resistance and the return of the downtrend, targeting down here into the 1.1400s again.
But again, all of that would likely change. A break above the black trend line, the green moving average, we’d look for the turn higher. But for the time being, none of that has changed. You take it back over here and you could see the black trend line, the moving average. Let’s zoom it in a couple of times here. There it is. So, like I said, even up into the blue-shaded area here towards the black trend line and the green moving average, we are still well within the parameters of the head and shoulders reversal pattern to go down and not up.
The only reason I would focus in on buying this would be that it breaks back above the moving average and the black trend line. So, for the time being, I think we only concentrate on shorts with the head and shoulders pattern. Even rallies into the upper-1.1600s, low-1.1700s becomes opportunities to go short in the direction of the reversal pattern, the head and shoulders. And again, we’re targeting down into the 1.1400s. There’s no guarantee it’ll make down there, but that’s the target.
We look down to the four-hour timeframe. Again, we could see some hesitation around the yellow-shaded area here, 1.1655. I still don’t think it’s out of the question. We could see it up here towards the blue zone, but at least at this point there’s no guarantees of that. It may just find resistance and go on down from here. So, if you’re looking for a short, this becomes your first opportunity to do that here at the yellow zone. Now, any push up to the blue zone becomes your secondary opportunity to go short for the EURUSD this week.
Let’s take it on down to the GBPUSD. Interesting here is I think we have the opposite situation. Where we’re looking for shorts on the EURUSD, I think it’s more likely you’re looking for longs at the current moment here on the GBPUSD unless, again, it breaks down through this significant barrier that we’re at. First thing I would look at would be the blue trend line. Second thing I would look at would be the 100-period moving average that’s paralleling along that.
Let’s zoom it in on the blue box, top right, and look at that. Eight days now challenging the blue trend line and the 100-period moving average. So, as long as it’s above this orange-shaded area, I don’t think you want to sell it. There is no reason to go short on top of that orange-shaded area. 1.3030, 1.3065 is the orange zone. As long as it’s above that, this is a long situation in the direction of the trend and only really if it breaks underneath that orange zone do you look for it to go short, which it hasn’t been able to do since all the way back here beginning of October.
So, again, I don’t think you want to go short on top of this orange zone. If you’re trying to trade the GBPUSD, it’s a long scenario above the mid to low-1.3000s here for the GBPUSD. Take it down to the four-hour timeframe. Doesn’t really change it. You could see the challenge back here. A little gap here, but challenging back down here, 1.3065. Look at what happened the last time, so again, don’t go short on top of 1.3065. Just makes absolutely no logical sense whatsoever. Only if it breaks through the orange zone do you look to go short.
Maybe up here at the blue zone. Maybe at the green zone becomes short opportunities, but at least right now I think the best short opportunity would be a break under the orange zone. Otherwise, staying long for the GBPUSD for the time being, or at least here at the very beginning of the week.
Moving over to the USDCAD. Interesting things happening here. The trend I say is up. I know over the past two weeks we’ve seen it falling pretty heavily, but I think the trend is still up. That’s the blue trend line here. Let’s go ahead and zoom it in on this a little bit. And there it is, and I think we could probably adjust this blue trend line just a bit. More like that, and you could see the market touching here in the middle, touching at the bottom, and that’s where we are right now.
I know. Again, like I said, the trend for the past couple of weeks has been more bearish that bullish. I see it. I understand it. So, we’re kind of stuck between the two trend lines. The rising blue trend line, the falling red trend line, and we’re trying to figure out what’s going to happen here. Are the buyers going to step back in, take back control? I think what we’re going to need to see is oil take a fall off right now. It’s been going up for the past several weeks. We’re kind of stagnant at the moment, at least for the past four or five days, but oil may be part of the driver here for this currency pair.
Rising oil. If oil goes up, we typically expect this to go down. If oil falls, we would expect this currency pair to go up. So, watch that scenario. At least at this point, I don’t think It’s a good buy scenario underneath the red trend line and the yellow-shaded area. I don’t think you want to buy it right now because we’re under resistance. Under the red trend line, yellow zone. If you’re going to buy it, it would need to break back above the red trend line, yellow zone.
So, this is your area to focus in on today. In fact, it could be an opportunity for a short scenario underneath 1.2710, 1.2735, knowing the risk and your stop loss would be above the yellow zone. That way, if it breaks above it, you’re nowhere from worse. A little bit of a bump in your trading account, but again, don’t buy it right now as long as it’s underneath the yellow zone. Getting a little bit lower towards the pink zone may be your best opportunity or more likely above the yellow zone.
Sellers probably more interested in this pair underneath the low-1.2700s. Let’s take it down to the four-hour timeframe. Zoom it out again. There you can see it just underneath that yellow zone. Again, I don’t think that this is a quality opportunity to go long. As long as it’s underneath that yellow zone, it’s more likely a scenario for going short here for the CAD. Again, we don’t at least today have any news out of Canada. In fact, the news out of Canada is a bank holiday for the day today, so be careful on this pair specifically because of that bank holiday, but again, I just don’t think it’s a quality opportunity to go long. More likely you would be considering shorts today here for the CAD underneath the yellow zone, 1.2710, 1.2735.
Moving over to the USDJPY. We do have a trade. Small trade that we’ve been holding since last week. This trade down here. 113.20 is a trade I entered last week. We’ve seen well over 40 pips of profit. I’ve locked in five pips. I can’t lose on the trade. It’s only sitting about 10 or 11 pips right now, so it’s not anything extraordinary at the current moment, but I think we’re playing well within the direction of the trend.
As you could see here on the daily timeframe, there have been multiple trends throughout the year of 2017. That’s what we’re highlighting here. Five and now the sixth trend for the year. We have been in an uptrend, but a period of congestion, top right-hand corner of the trend. Let’s zoom it in a couple of times. Look at the black box. That’s what we’re highlighting. The black box shows us that period of ranging, congestion, whatever you want to call that. It’s just been bound up between the orange, yellow, and the green-shaded area.
We are indeed underneath the longer-term blue trend line. That’s something of course that we should note. We’re underneath that blue trend line, so could be our first clue for some intraday reversal here or longer-term reversal if it breaks down through that orange-shaded area. Last time we were here underneath it, we saw resistance. That’s where the black circle is. We’ve seen support here already. If anything, I would say going short right now is a little bit difficult.
Zoom it in one more time. I think going short right now is a little bit difficult because it’s on top of support and for the past multiple weeks, we go all the way back here to the end of October, we have seen support here into this orange zone. So, going short and selling on top of support does not make logical sense to me. I think we’re on top of support. The only reason to go short and sell would be that it breaks this boundary, this barrier, this orange-shaded area. So, it has to break underneath it before we look to go short. As long as it stays above it, I’m going to hold what I have, looking for it to bounce back up to the yellow zone as it’s already done. And of course above the yellow zone, the green zone becomes our target for potential continuation of the trend.
And again, so this orange zone is your main area to focus in on. That’s 113.15, 113.55. Support there, potentially goes back up. Breaking there, potentially sees further reversal for the downside for the USDJPY.
AUDUSD. This is the other trade that I have going down here from, again, last week, 0.7680. That sell into resistance again. Black circle back here on the left-hand side. You see resistance. Take a look at the past several days here for this currency pair. Just stuck again and that’s been the name of the game for many currency pairs. We have been kind of in a holding pattern. We’ve been stuck underneath resistance, so last week I took the short. I took the sell into the blue zone. It’s working out nicely. Of course a little bit of a gap over the weekend helped out a little bit here on the way down.
The orange zone of course is clearly our support. We’ve seen it here multiple times close to the 0.7635-level. Of course we would love to see the breakdown of that orange zone for a continuation of the trend. No guarantees there, so protect profit if you’re in this trade as well. Should you buy it? Maybe. I mean over the past couple of weeks, buying here at the orange zone has been a profitable scenario, so be cautious there.
We have been studying correlations between AUD and gold prices, so pay attention to that because, and we’ll study it again here in the live Trade Room coming up later on today, but pay attention to gold prices and AUD prices. It’s very interesting, the correlation there. We’ll look at it again during the Trade Room.
If you’re looking to go short, don’t do it now. It either needs to be back at the blue zone or under the green zone. Long scenarios probably back above the blue-shaded area. If you’re looking for a long, likely better above the black trend line and the blue zone for the AUDUSD.
And lastly, NZDUSD. We’re in a downtrend. That’s the red trend line. Look back to the blue box. The black box on the left-hand side. You could see the market bouncing around in there quite a bit between the yellow and the green-shaded area. We’re today just squeaking back underneath the yellow zone, 0.6915, 0.6940. So, as long as it’s under the yellow zone and really we just talk about the trend line, under the trend line, then I don’t think you want to go long. I just don’t think going long right now is the best opportunity. I think going short would be a better opportunity here for the NZDUSD.
Zoom it in a couple of times, so we can really get a handle on that red trend line. Take a look at that. It’s been going down. There’s no real new news there for quite a long time. The probably most important thing is recognizing the pattern within the trend. A little bit of a rise there and now we have been in a little bit of a rise here. So, the question is: are we returning to the downtrend? Again, I think underneath the yellow zone is really what you want to focus in on.
Four-hour timeframe. As you get down there, notice how we are now back underneath that yellow zone. So, for the time being, I don’t think buying right now is any interest to me. I don’t think I want to buy it under that yellow zone. Obviously look at the resistance back here. So, as long as it’s underneath there, I think it’s more likely we’re looking for a short opportunity, targeting back down to the green zone. And the only reason to buy would be that it gets back above the yellow zone for the NZDUSD.
So, pay attention to that yellow zone. That’s 0.6915, 0.6940. Under it, may see some further movement lower. That’s what we saw back here on the left. Back above it, could see the return of the upside 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.