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 December 4, 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 in all trade setups.
Getting started here on the USDCHF. Last week, well, last Friday, we saw a significant sell off of the USD against the CHF as the market moved within the day from the mid to low-0.9800s all the way back down into the mid to low-0.9700s, and then we closed out around the mid-0.9700s. 0.9750 to 0.9760. We closed out on Friday. Then here we are. We opened up the new week. We opened all the way back above 0.9800 and now pressuring back into the mid-0.9800s once again here for the USDCHF.
So, quite a volatile weekend. A big weekend. Early, before the weekend, we got some political news out of the US that caused the USD sell off, and then of course we have the tax reform bill passing over the weekend. So, again, quite a volatile couple of days here for the USD, and you could see that significant sell off and then rally. Prior to that, we did see the market kind of stuck in a little bit of an area of congestion or range here for the USDCHF.
We did take a short actually on Friday morning. Was able to capitalize on that fall. That short being closed out as the market turned back around and turned back into that area of congestion once again. I don’t think going short today is a good idea. Of course the market right back on the rally for the USD. USD doing pretty well so far today. Going short is not really the main objective for the day.
I think at this point, the way the market is moving, breaking back above 0.9855, above the orange zone challenges 0.9880, 0.9895, the purple zone. Of course if it ever breaks above that black trend line, we could be looking for return of an upside trend here for the USDCHF.
Zoom it in a little bit on that. So, here we are. We’re looking at the fall on Friday. The gap and rally here for the USD today. 0.9835, 0.9855 is the orange zone. Pushing above that today, we challenge the purple zone. And then of course if it ever breaks that black trend line and that purple-shaded area, we’ll look for the continuation higher. It doesn’t have to do that, but I think that’s the momentum right now that the USD has. I really doubt that we’re looking for a fall off of here again today unless we get some news of course.
It would challenge the pink zone. If it does, then of course if it breaks back under the pink zone, we look for it to go lower once again for the USDCHF. So, couple of things to watch today. I don’t think today we’re really clear on direction for the USDCHF.
Moving over to the EURUSD. Again, very volatile coming into Friday. We saw a significant rally along the black trend line on Friday. Went higher. Then we suddenly see the gap lower over the weekend. Let’s actually zoom in on this a little bit better. You could see that here. The rally. Quite volatile on Friday. The gapping lower. And now sitting just underneath 1.1860, 1.1885. That’s the purple-shaded area.
So, we’re sitting underneath there. Of course we have the weekend gap. If it breaks back above the purple zone, 1.1885, of course clear target for the EURUSD would be all the way back to the orange zone. Settling back lower again. If it finds resistance here at the purple zone for the rest of the day, settling back lower, our next support is all the way back down here at 1.1820. By the way, 100-period moving average sitting just around the 1.1795-level. You see it just underneath the green zone here.
So, if we break that and the green zone, of course we’ll look for the market to pressure all the way back down to the blue zone. So, again, we know where our decision points are. It’s just waiting for some clarity out of the market. The rally. The fall. The rally. The fall. We just have seen quite a bit of volatility for the EURUSD. I’d love to see it get out of this area of congestion here.
If you’re a buyer, you’re probably more likely looking at the green zone or above the purple zone for long scenarios. If you’re a seller, maybe the purple zone, but I think more clarity is the break of the green zone underneath it to go lower for the EURUSD.
Moving over to the GBPUSD. Again, nothing really new. It’s just the same as the EURUSD and the USDCHF. We’ve seen quite a bit of volatility over the past couple of days. It’s been in a significant rally, so that’s the first thing that we need to note here on the GBPUSD. Significant rally. So, if you were going to trade it within the direction of the trend and the rally, buying makes more sense than selling at the current moment.
Obviously though the orange-shaded area, 1.3550, 1.3585, is resistance. Look back here to the left, where the black box is. The market bounced around there for several days before reversing and turning back lower again. So, that’s about the same area we’re at right now. Of course we had the volatility from last week’s move and the weekend move, but it is holding above the yellow-shaded area, 1.3445, 1.3480. Holding above that now. Challenging back towards the orange zone.
So, if you’re a buyer, if you’re looking to buy it and you haven’t bought it already down here at the yellow zone, don’t buy underneath that orange zone. History tells us that this is resistance, so buying close to it, there’s risk that the market bounces off of it today and goes back down. So, don’t buy under the orange zone. You would buy it or go long if it breaks the orange zone, 1.3585, top of the orange zone.
Breaking that, goes higher. Could of course find resistance and reversal. We’ve seen it before, so keep an eye on that. Otherwise, if you’re a buyer, possible opportunity at the yellow zone.
Take it down to the four-hour timeframe. I don’t think it helps us out a whole lot except for the fact that we see the rally, the sell off, the rally. We know there’s always Brexit information that could affect this currency pair as well, so we want to keep an eye on that in the news, but definitely the yellow and orange zones are our closest levels to take a peek at for trading opportunities. Buyers, yellow zone or above the orange zone. Sellers, looking at the orange zone for resistance and reversal, or under the yellow zone for some turn lower for the GBPUSD this week.
Moving over to the USDCAD. Well, we’re stuck in a familiar range, aren’t we? The black box that’s over here. Yellow. Orange. Blue. Even with last week’s volatility, we haven’t changed that. We’re still inside that range. Take a look there. I’ll just widen that black box out just a touch, and we’re still stuck inside that yellow zone right now. 1.2670, 1.2710 is our support. You would think with the momentum we had carried through Friday that it would break there and it didn’t, so keep an eye on that.
If you’re looking for the short, and let’s go ahead and zoom it in on this. If you’re looking for the short here, you want it to break this yellow zone and it hasn’t done that yet. So, that’s what you’re looking for. A break of that yellow zone, 1.2670, before you would take a short. You didn’t want a short here. You didn’t want a short here. I don’t think you want a short here. So, if you’re looking to go short, 1.2670. A break of that starts to target lower levels.
But until then, you can’t really come to expect it until it breaks through there. Do you really want to go buy and go long right now? I don’t know if you want to do that either because it’s been a significant sell off here for the USDCAD, but we could watch this area for possible clues to support and reversal. Support and reversal from the yellow zone could take it back to the orange zone or even the blue zone at the top of our range.
So, we’re watching for support and information, clues, indicators of reversal to go back up, or a breakdown of 1.2670 takes it back lower again. Four-hour timeframe won’t change that a whole lot except for the fact that we see this pretty interesting candle potentially developing here. Smaller body, longer wick. Could be our first signs of an infusion of buy orders that could take it back higher again for the USDCAD.
Moving on over to the USDJPY. What a volatile couple of days it’s been on this currency pair as well. Significant sell off here. Rally. Last Friday of course quite volatile on the fall and then it hit the 100-period moving average. It bounced right off of it and now we see it gapping higher now into the 113s for the USDJPY.
So, let’s go ahead and zoom it in on this. Orange zone clearly is our resistance, so let’s consider that. The orange zone as resistance. I’m going to try and bring this yellow zone over a little bit if I can get it selected here. There we go. So, the orange zone is our resistance. I don’t think you want to buy it right now. Take a look back here. We could see historical support offering a clue to resistance. Happen also to be the .618 fib of the downtrend. High to low puts the .618 right at 113.24. That’s the orange-shaded area.
So, I don’t think you want to buy it right now. If you’re going to go long and buy, you want it to get above 113.30, above the orange zone. Then it takes it back to that yellow zone that I just moved over. Otherwise, if you’re going to buy it, you want to go back down to the purple zone. So, buy at the purple zone or above the orange zone. So, neither one of those is really an opportunity at the current moment. If anything, maybe an opportunity for resistance into the low-113s. Targets back to the purple zone.
Of course if it ever breaks under the purple zone, we look for a push back lower. Look at this candle from Friday. Let’s go ahead and take it down to the four-hour timeframe. Look at that move. Significant sell off. Let’s measure it. From the open of the candle all the way up here into the 112.70s, down to the low of the candle into the 111.40-level or so, 130-pip candle and then suddenly reversed and came back up. Gapped higher over the weekend, pushing above 112.70.
So, very interesting couple of days. Kind of a tough couple of days if you’re new to trading to really figure out what direction to trade there on the USDJPY. But at least today, we know the orange and the purple zone are our resistance and support for the USDJPY.
Take it over here to the AUDUSD. A couple of things that we’ve been studying. Of course red, blue, black, blue. The blue trend lines being little bits of rallies within the overall downtrend ad we’re in a similar area down here at the bottom right. Let’s go ahead and zoom it in. We see the blue trend line, but I think I’ll highlight in a little bit different way as well.
I’ll just pull this orange zone over a little bit too like this, and this yellow zone. Let’s get that over. I think those are two very important levels. I’m going to take this box right here. I’m going to make it a different color. Let’s make it black so it’s easy to see and I’m going to bring it right into here just like that. So, there you go. It’s that area there that we want to pay attention to. Really look at the volatility from Friday. This big blue candle.
Resistance at the orange zone. Support at the yellow zone. That’s our area to really watch. So, if we’re looking for trend – uptrend, downtrend -, I think if we’re looking for an uptrend to ensue, I’m going to take this blue trend line and put it out here like this. If we’re looking for an uptrend to ensue, we see higher low, but we need to see a higher high. So, that means it needs to break the orange zone. If it breaks 0.7635, 0.7630, we look for the beginnings of a new uptrend.
If it doesn’t do that and can’t break through the orange zone, targeting under the purple zone, targets the yellow zone. That’s the support in this entire scenario. And a breakdown of the yellow zone, we look for the downtrend to continue. Remember we’re coming from an overall downtrend, so that’s something to consider. Buyers are watching for the break of the orange zone. The low-0.7600s to turn this into an uptrend. Sellers are looking for it to break the yellow zone to resume the downtrend.
Until then, it’s just been bouncing around in here. So, if you’re looking for a short, potentially the orange zone is where you’re going to find those opportunities. If you’re looking for a long, well, at least today that purple zone in the middle of the range is very interesting. You could see right now the market finding support at that purple-shaded area, so that might be an area that you’re looking at. It’s already been there. I would say that probably your most clarity comes on resistance and reversal from the orange-shaded area for the AUDUSD.
Take it down to the NZDUSD. Very similar, isn’t it? We see that black box. Bottom of the downtrend. The black box being the range. Nothing really new here on the NZDUSD for this week. Blue zone, 0.6815, is support. Green zone, yellow zone kind of mid supports and resistance inside that black box. And of course the orange zone being the top of that area.
Take it on down to the four-hour timeframe. It doesn’t really give us a whole lot to go on. We had the significant rally here. The gap lower. I think at least for the day today, we’re underneath this green zone. 0.6860, 0.6880. That would be the direction I’d focus on, targeting back down to the blue zone. The only thing that changes that of course is if it gets back above the green zone. We start rallying once again back to the yellow or the orange zone at the very top of the range and the chart here.
But right now we are under the green zone, so there’s not really any reason to go long or buy until it gets back above the green zone 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.