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 9, 2017. Today we’re going to take a look at the US Dollar versus the Swiss Franc [USDCHF] for today’s trade analysis.
I’m actually going to zoom out a little bit here on the daily so we could see the two different trends that we’ve been studying in the live Trade Room. First off, the blue trend line. Significant downtrend. The market has changed directions along the red trend line. It’s been moving up for the past several weeks, capping out resistance highs just right around the parity level, just a little bit above parity, the 1.0000-level, but it’s still well within the parameters of the uptrend.
We could see a pattern within the uptrend that we’ve been talking about in the live Trade Room as well, where it was moving up, went into a period of ranging, congestion for several days here inside the black box, and now we’re in a very similar period like that in the blue box up here above the blue-shaded area, below the pink-shaded area, still within the parameters of the uptrend. So, what we’re looking for are opportunities to go long in the direction of the trend.
Typically, when you’re looking to go long in an uptrend, buying on dips lower or pullbacks lower is what you’re looking for, for lower risk and higher potential reward. Right now the potential target, the potential cap of profit is happening at the pink zone just above the parity level. And the best way to maximize your potential profit or gain or target would profit is to allow the market to dip down first, and that’s what we’ve seen today. We’ve seen across the board a USD pullback.
That USD pullback is now giving us some opportunities potentially to take some trades in the direction of the trend on several different currency pairs. So, as it’s come down into the blue zone, where factually, statistically it’s not anything I can make up, we have found support here into the blue zone, 0.9940, 0.9965. So, dipping down here gives us an opportunity to take a long or a buy.
There’s risk in every trade. I can’t disguise that. There’s risk that the trade can fail. I’m not in control of the market. So, the risk is the market breaks down through the blue zone. So, we know what the risk is. We know the potential is if we buy it in the direction of the trend, it challenges back up here towards the pink-shaded area. And of course if it can ever break that pink-shaded area, we’ll look for a continuation of the trend and a move higher.
Let’s go ahead and zoom it in a little bit more. And as we do that, we can see, again, for the past several days, support here into the blue zone. Resistance: pink zone. If you’re looking to go long, let’s just say for the past eight, nine, ten days, where has been the best place to buy and go long within the direction of the trend? That’s the blue-shaded area and that’s where we are today. So, if you’re looking for a trade opportunity on the USDCHF, this becomes the area in which you’re going to look for that opportunity, between 0.9965 and 0.9940. And again, like I said, the risk is pretty easy to figure out. We just don’t want it to break underneath that blue-shaded area, so your risk or stop loss would be underneath the blue-shaded area.
Four-hour timeframe is not really going to change our mind about that. We’ve actually, last week, saw a couple of news spikes. The news drove it down into the blue zone and there was this sudden reversal where it went back up to the pink-shaded area twice over the past couple of weeks. And so, we could see that this is where the market is now, giving us an opportunity just simply to take a longshot here, targeting the pink zone. And of course a break above the pink zone, we look for the market to go higher.
And the risk is easy. Again, we just don’t want it to get underneath this blue-shaded area. In fact, it’s a pretty light risk if you really take into account the distance between current market price and that black line, which is underneath. We’re only looking about 30, 35, maybe 40 pips, depending on, if you were to get in it, where you would get in it. If you get in the middle of the blue zone, that risk becomes smaller. Your profit target becomes larger. And again, the hope is eventually we see the buyers return into the trend and drive it through the pink zone and move it higher.
You could see that I am already entered into the trade, 0.9955, but I think anywhere between 0.9960 and 0.9940 becomes an opportunity for you to look for a longshot here. And again, the risk is simple. We just don’t want it to break underneath the blue-shaded area. Forex Black Book is green. We don’t have a bullish signal yet, which would be a yellow or a green buy signal, but definitely something that we’ll watch for to boost our confidence to stay in it, targeting back to the pink-shaded area.
I think we have a very similar situation over here on the USDJPY. The trend is up. That’s not too hard to see. The blue trend line. We’ve been studying that in the live Trade Room. We’ve come down to the bottom of this black box. Let me zoom it in on that a little bit, and you could see the bottom of the black box, the orange-shaded area. We’re looking at a couple of weeks here. 14 trading days we have seen the market sitting on top of this orange-shaded area, 113.35, 113.15.
The expectation again is as long as it sits above that, it’s within the trend pattern. We haven’t seen a new lower low, which would be lower than this low here. We haven’t seen a new lower low, so the trend pattern is still there. If you’re looking for the longshot, this is where you’re going to look for it. We’ve seen a pullback of the USD. Some caution on the USD today. Both the CHF and the JPY pulling back. Risk aversion maybe. Cautious in the market.
We know that there’s potential tax reform information coming out for the US, and maybe that’s causing some caution for the USD. Either way you look at it, within the trend, if you’re looking to buy, you wanted it to go down. It gives you better risk-reward if it goes down. So, a similar situation here on the USDJPY. If you’re looking for a longshot, this is where you’re looking to take it.
Four-hour timeframe doesn’t change that. We could see it coming down into the orange zone. Look at the last time it settled down here as support. We’ve seen actually a couple of times, where it’s dipped down here to the orange zone. The low of this candle right here, the lowest low that we’ve seen it take underneath the orange zone before returning higher was 112.95. So, if you’re looking for risk, the risk is pretty easy. At least at this point, we don’t want it to get through the orange zone first, but if it does, the worst-case scenario is that it breaks the last low, which is that 112.95-level.
So, the lowest you can buy it if you can get it into 113.20, 113.15, look for the longshot and then you have the opportunity to stay in the direction of the trend. Now, all that could change if it breaks through the orange zone. Again, I don’t control what’s happening here, but I just know that for the past couple of weeks we’ve seen the market find support here and move back in the direction of the trend. There’s really, other than some caution, maybe some caution on tax reform. There’s really no significant news reason that we’ve seen over the past couple of days to cause the USD to pullback like this.
So, it’s just giving us a new opportunity as it dips down into support. I’ve already taken my entry into the 113.30-level. You could look for maybe 113.25 if you wanted to. Get it a little bit lower. Either way you look at it, I think this is an opportunity.
And going back to yesterday’s suggestion, the AUDUSD, I’m still holding that trade. It has not failed. It’s still in there, 0.7675. I suggested yesterday selling resistance. That’s the blue-shaded area, 0.7670, 0.7690. It’s still there, holding and floating. Looking for a very similar, yet opposite to what we just talked about on the USDCHF and the USDJPY. Selling resistance, where the USDCHF and the USDJPY are buying support, in the direction of the trend, the black trend line.
Of course a rise in gold prices over the past couple of days has given this a little bit of a boost higher. We really need to see gold maybe take a little bit of a tumble again for this to push back down towards the bottom of the trend, which is the orange zone, 0.7635, 0.7620. And of course a break there, looks for it to go lower.
Down to the four-hour timeframe just to give you a little bit of a better view of what’s been happening over the past several days. Take a look at that. Resistance. It’s still in congestion. Still in the blue zone. Hasn’t broken the blue zone. That’s the risk in this trade, is that it breaks above the blue zone. So, I’m still looking for the sellers to come back in. Drive it back down towards the orange-shaded area, 0.7635, 0.7620. And of course through there, we look for the continuation of the downtrend for the AUDUSD.
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.