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 July 17, 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 management strategies as you go through all trade setups this week.
Let’s get started here on the USDCHF. We’re looking at the daily timeframe. Probably most important is down here at the bottom right-hand corner of the chart, where we see this black box and the market has been contained within a period of congestion or a short-term range here between the pink-shaded area, 0.9600, at the bottom of the pink-shaded area and the blue zone, 0.9660, 0.9685 at the top of our little range here.
Let’s count them out. Today included, ten days we have been stuck inside of this little range. So, the question of course is are we going to look for the return of the upside or is it going to breakout back to the bottom side. We don’t know that for sure, but we can look for evidences of those types of price actions. It is interesting that our Forex Black Book trend bar is still green this week, which would imply some bullish or at least a slowdown of the bearish price action.
It’s either going to start looking to go bullish or it’s just going to slow down this bearish price action and eventually return to the downside. So, it is interesting that it’s green and predominantly bullish this week. We consider a couple of other things here. Price action around this pink-shaded area we’ve seen multiple times now finding support here. So, there’s one of two options at this pink zone. Either you’re going to look for an intraday bounce, a buy from 0.9600, and you’re going to at least at minimum target back to the blue-shaded area. So, that’s what it’s been doing for the past nine or ten days, so that might be a possible opportunity, so we watch for support and therefore reversal on smaller timeframes.
Next thing we’ll watch for would be the final breakdown of 0.9600. If it breaks out underneath that pink zone, we look for it to go lower down to the green-shaded area. Four-hour timeframe is not really going to change that a lot I don’t think, but as we get down here we could see the market again still bouncing around in here. I think if you’re looking to go long and buy within our little range here, if you’re looking any consideration of buying, you want to see some price action of reversal. I don’t think there’s anything like that yet.
In fact, probably your best price action of reversal would be an example somewhat like this, where we saw the big red candle and suddenly a big blue candle showing us an infusion of buy orders. We don’t see anything like that over here. It’s just a big red candle. So, we don’t have any evidence of a short-term or even a longer-term reversal from the pink zone. The next thing we would look for likely, which it hasn’t done since getting inside this range, would be a breakout underneath the pink-shaded area. So, one of those two things needs to happen today before we trade the USDCHF. Breakout under the pink zone or bounce off and get back above 0.9620 today for the USDCHF.
Moving over to the EURUSD. Here’s an interesting look at the EURUSD. This is the weekly timeframe. Weekly timeframe, and I want to show you this because all the way back to January of 2015, two and a half years ago, we have been in a large range here. The big black box. All the price action you see on the chart is contained within that big black box.
What’s most important about it is we’re at the top of that range. You look at the last several times we touched the top over the past two and a half years. It had a significant reversal all the way back to the bottom. Top of the two red trend lines sows you that. So, here we are. Black trend line right back into that 1.1485, 1.1525-level, so one of two things is going to happen. It either continues the range, reverses here and goes back down or it breaks out above 1.1500 and continues that upside.
We’re at a critical decision point here for the EURUSD. So, that being said, we take it down to the next smaller timeframe. Let’s go down to the daily, and you could see there we are right there at that pink-shaded area at the top. We’ve been underneath it. For 12 or 13 days we’ve been toying around with it inside this area, so don’t buy it right now. I think that’s probably your worst case scenario. If you were to buy right here and it does that reversal, that’d be your worst case scenario. You only really buy it if it breaks above that pink-shaded area.
So, I think more likely looking for resistance and clues to reversal would be your opportunity for lowest risk and highest reward, which of course if you look at the USDCHF, we’re looking for that to bounce off support and potentially go back up if we see those clues to reversal. So, again, don’t buy this right now. Waiting for it to break above to buy it or watching for resistance and reversal for the EURUSD this week.
GBPUSD. We are, again, at the top of the trend. If I zoom out a little bit, you could see we have been kind of just kind of slowly meandering our way back up after the big vote. Brexit vote way back here. We’ve been slowly meandering our way back up, but we’re at the top of the current price action. If you just look at it in this view, you could see we’re at the top of the trend. Difficult to buy it anything at the top of a trend.
So, I think we’re probably more likely beginning to look for some pullback, reversal. At least some sort of phase of a pullback. Even if you just take this little short range here, this short trend here, it would be more fruitful to wait for it to pullback off of the highest high before we would look for a new buy. So, I think we need it to pull back before we buy it, so watching for opportunities in that direction may be something we look at as we go throughout our week this week.
Over to the USDCAD. Here’s something important. I kind of scooted the chart over, so you could see back to the left-hand side between the pink and the yellow-shaded area. Black box. Bottom left-hand corner of the chart. You could see multiple times. Probably even most important will be this area right here, and I’ll just put a circle here. This area right here, where the circle is on the far left-hand side of the chart. You could see several days bouncing around between the yellow and the pink-shaded area.
Why am I talking about that? Well, that’s where we are right now. We’re at the pink zone, 1.2625 to 1.2670, as our support. Really only if it breaks under the pink zone do we look for it to go to the green zone, like underneath the black circle. Above the pink zone, we could find some support and reversal here for the USDCAD.
Take it down to the four-hour timeframe. Look at our current area, and let’s zoom it in a little bit. Look at our current area. Again, the pink zone is our critical decision point. Either it’s going to have some short-term reversal here. Go back up towards maybe the yellow-shaded area here, or it’s going to finally break down through this pink zone, 1.2625, and continue to go down to the lower area, which is that green zone at the very bottom of the chart. That is the direction of the trend. Probably the direction you want to focus on until something changes for the USDCAD.
Moving over to the USDJPY. We’re in a pullback or downtrend phase right now. The overall trend has been bullish. You could see the black trend line, but last week we had a pretty strong sell off for the USDJPY. I think we’re coming into an interesting area. The 100-period simple moving average sits right around 111.80 let’s call it. 111.80, just underneath the green zone.
Now, we’re still a little ways from that. 50 to 60 pips away from that right now, but definitely something that we’ll want to make note of is that green zone right into the upper-111s if it continues to go down. Otherwise, back above the red trend line, the short red trend line over here could be the return of the upside. Here’s something else I want to mention. Fibonacci. Low to high. The black trend. Lowest low of the black trend line. Highest high of the black trend. Fibonacci there puts the .382 at 112.30. Guess where that is. That is right here at this blue zone and our current support.
So, we’re touching the .382 Fibonacci retracement level of the previous uptrend. What does that mean for us? Well, there’s one of two potential scenarios here because of that .382 Fibonacci. It either bounces off and returns in the direction of the black trend, which is an uptrend, and we watch for clues to that, or it breaks down that .382 and continues to go down towards the moving average. So, critical decision point here for the USDPY right around 112.30. Bounce, goes back up in the direction of the previous uptrend. If it does that, we might even look for a new high above the last ultimate high into the green zone at the top of the chart. Break above the red trend line would give us a better look at that.
Four-hour timeframe. Again, I don;t think that changes it, but definitely that blue zone comes into play as a critical decision point. We’re currently finding support there. .382 Fibonacci retracement level. A break there goes lower, but a bounce may see the return of the uptrend for the USDJPY.
Let’s take it over here to the AUDUSD. Here’s something very, very significant that we studied last week. Similar to the EURUSD, we have this long-term. We’re looking at the weekly timeframe here. This long-term range. We’re looking all the way back to February of 2016, so about a year and a half ago. We have been inside this black box, the range. Resistance at the green zone, 0.7720, 0.7750. What’s important? We’re above that right now, but we’ve actually seen it all the way back up to this yellow zone before.
If I take this black circle on the very left-hand side of the chart, let’s make it a different color. Let’s make it blue, so the big circles are a different color. So, the blue circle, left-hand side of the chart. We’ve actually seen it touch this yellow zone, 0.7830, before within this past year and a half ranging period and then suddenly reverse and went back down. I’m not saying that’s what’s going to happen now, but I just want to make note of that because that’s historical price action.
In fact, we can’t change that. So, if this week suddenly goes bearish and gets back under the green zone, which is 0.7750, 0.7720, wouldn’t that be interesting for a potential reversal opportunity? I don’t think you can say that yet, but definitely something to watch for. Now, a breakout above 0.7830, the top of the yellow zone, nullifies that. We likely look for the continuation of the upside. So, above the yellow zone, we go higher and that would be a multi-year new high if it gets above the yellow-shaded area.
Staying under the yellow zone, maybe some intraday reversal back to the green-shaded area as support. This entire area that was resistance back here, where the black circles are, will become our support, 0.7750, 0.7720. So, if you’re a buyer, you’re looking for a pullback to the green zone or a break above the yellow zone. If you’re looking for reversal, I think you need to wait for some evidence of reversal before you look for a short on the AUDUSD.
Take it over here to the NZDUSD. Similar situation. We’re at the highest peak high we’ve been in a long time. The blue indicators. The black indicators. The trend lines, boxes, and circles that you see here show us some very familiar and similar situations. Top of the black trend line. Box. Circle. Eventually reversed and went back down. Top of the blue trend line. Blue box and blue circle shows us resistance at that same pink-shaded area, 0.7330, 0.7350. I think it’s a clear area to watch for resistance and reversal. Why? Because the last couple of times we were here, pink and blue zone, it reversed and went back down.
So, I definitely would be cautious about buying anywhere between the pink and the blue zone because of the history of this level. That’s all I’m trying to say. I’m not saying you can’t buy it. Just be cautious. Wait for the right opportunity. Pullbacks or breakouts will become your opportunities. Pullbacks to support or breakouts above resistance become your opportunity to buy or go long. And be cautious on that because of the history of this pink-shaded area. If you’re looking to go short, you’re at the area. You’re at the spot where you would begin looking for an opportunity to go short.
Zoom it in a little bit. You could see some hesitation already here into the pink-shaded area. I believe 0.7330, 0.7350 is your opportunity to look for resistance and reversal. And only a real breakout above 0.7350 becomes the continuation of the uptrend for the NZDUSD this week.
From Forex Traders Daily, this has been your daily analysis with Ross Mullins. 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.