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 January 5, 2018. Today we’re going to be taking a look at the Euro versus the US Dollar [EURUSD]. Before I begin the analysis on the chart, it’s important to recognize that in about 40 minutes from the recording of this video, we have significant news out of the US and Canada popping up at 8:30 Eastern US time. Employment change. Trade balance. Unemployment rate out of Canada. Non-farm payrolls. Earnings. Unemployment rate out of the US.
Definitely could change everything in the market if it’s significantly off of the forecast or the expected numbers. If we get a significant deviation, we could change everything we’re talking about here. But positive news would typically expect the EURUSD to go down. Positive news for the US would typically expect that, but I think it needs to be pretty significant deviation for us to see that. Negative news, of course we look for the EURUSD to typically go higher.
So, keeping that in mind, let’s take a look at the EURUSD. We’re at the highest highs. We’ve been there for a few days now. You take a look at the chart here and we could see the previous trend in 2017 rising. Then we’ve been in somewhat of a range up here. The big blue box that you see here on my top right-hand corner of my chart. Big blue box. We’re at the top of that range and into significant resistance highs, the mid to upper-1.2000s.
Let’s zoom it in one more time. You look at the last time we were here, back here where the green circle is. Three times we came up into that yellow-shaded area and reversed and went back down. So, we’re in that same area right now and we could see the past three days struggling around here. Buyers continue to try and pressure through 1.2065 and the sellers come right back in and hold it off from breaking through.
So, we’re looking at one of two options here into the yellow-shaded area. If we get significantly negative news on non-farm payroll earnings, unemployment rate, or any negative news out of the US, we look for this to likely break 1.2065 and continue higher, which it so far has been unable to do since capping out here in August and September of last year.
The next thing we look for is this finally becomes a reversal point and the uptrend begins to become a downtrend. We look for indications and clues to that. Significantly positive momentum and sentiment for the USD begins some indication of reversal. We have been looking at a reversal pattern using harmonic patterns in the live Trade Room. So, if you want to see that harmonic pattern, join us in the live Trade Room later on today.
But we’ve been looking at a reversal pattern with harmonic patterns here into this yellow-shaded area. So, there is a harmonic pattern here. We’re into resistance. The potential of some positive news may impact this to go back down a little bit. We see that happened last time we were here. So, we know that this yellow zone is where we’re looking for the trade setups.
Let’s go ahead and zoom it in. So, again, what we’re looking for probably is for the market to finally successfully break out above here. Let’s see. Let’s draw this out. I’m going to put to look like a candle here. Let’s just draw this out. So, we need either a candle to get above and give us some confidence that this is actually breaking it, which it hasn’t been able to do. We don’t see any full candles above 1.2065. So, if it finally gives us that full candle above the yellow zone, that’s going to give us increased confidence that the market is going to continue to pressure higher, and we’ll look for that after the news.
The other side of the story is if it suddenly turns bearish and we see this as a bear candle and we see it closing bearish and the market has bearish sentiment, then we look for it to continue to pressure lower. So, after the news we’re looking for one of two things. It either breaks through 1.2065 with negative US sentiment or we look for positive US sentiment. We finally get enough sellers in the market to turn this back lower for the EURUSD today.
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.