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Transcript of Video
I’m going to get started today with an overview of each of the seven US currency pairs. We do have a holiday week this week. We will not be having an update video or a Trade Room on Thursday and Friday of this week. We won’t have another update until Monday of next week. So, I wanted to go ahead and go through an overview of each of the seven major currency pairs with the US dollar, kind of give you a heads up of things you could be watching over the next several days, until we can get our next update on Monday.
Let’s get started here on the US Dollar versus the Swiss Frank [USDCHF]. As you can see, this currency pair has been in an uptrend for quite some time. We go even beyond the left-hand side of the chart, where it’s been an uptrend, but even recently, we see the uptrend in this channel, highlighted by the blue trend line on the bottom and the rising lows, and the red trend line on top and the rising highs. Rising lows and rising highs tells us that we are in an uptrend, but I think it’s very important for us to realize that we’re at the very top of that trend and every time it’s made a high close to this red trend line, here and here and here, we’ve seen a little bit of reversal or a pullback here for the USDCHF.
So, I think that may be what we’re looking for here. Yesterday, in the Trade Room, we went back in time and studied some historical support and resistance, and devised this level here into 0.9880 to 0.9900, the pink-shaded area at the very top of the chart as a historical level of support and resistance, and that coincides right there with the top of that current red trend line that we see there at the top of our rising trend channel. So, we’re in an uptrend. However, we’re at the very top of the uptrend channel and into resistance. High probability that we’ll look for resistance.
We’ve already seen it yesterday and so far today, and maybe a little bit of a drift back down, which could end up being something very similar to what we see back here in these timeframes. Now, I don’t know if it’ll go all the way back down to the bottom of the channel in the blue trend line, but we definitely have an expectation that we could see a little bit of a drift lower here over the next few days. And that’s a good thing because if you want to trade in the direction of the trend, it’s always better to buy at the bottom of a dip.
We can even see. You just take a few arrows. You say, down here, it was best to buy right there into the green-shaded area at the bottom of the blue trend line. It was best to buy here into the purple-shaded area as it made the dip lower. It was best to buy here at the bottom, where it tested the blue trend line again. So, three times, and you could probably even go here and say right here, so there’s several times within the uptrend channel where it was a better lower-risk, higher-reward opportunity to buy the USDCHF.
So, in that sense, we might be looking for it to make a little bit of a retracement. Same thing with the Forex Black Book. It’s green, so we’d want it to go down to give us a green arrow on the 4-Hour Chart. So, I think today you’re likely looking at resistance over the next few days here into the pink-shaded area. 0.9880, 0.9900 over the next few days. As it dips into support, we’ll be looking for opportunities for buying in the direction of the trend. First support will be here at the yellow-shaded area. This last resistance high will provide some support. That’s just above the .382, around the .236 of this last leg of the uptrend. Much deeper, the .618 would be down here towards this pink-shaded area, and that would then be down closer towards the blue trend line, and that’s kind of an overview for the USDCHF.
Let’s move on over to the Euro versus the US Dollar [EURUSD]. And here on this currency pair, we’re exactly the opposite of what we’ve just discussed on the USDCHF. We see the downtrend channel. We see the blue trend line on top, representing lower highs. The red trend line on the bottom, representing lower lows. So, we’ve been in a downtrend. If I squeeze the chart in just a little bit, just like the USDCHF, we went back in time on the EURUSD yesterday during the Trade Room and discovered this blue-shaded area and the red, horizontal lines as historical support and resistance.
That happens to match where the current market is finding support into that red trend line. So, for the day today, just the opposite of what we were looking at on the USDCHF. It’s more likely we’re looking for support over the next couple of days, especially going into the holiday. That we’re looking for support today. Maybe a little bit of a bounce back higher again, taking it back into this green-shaded area.
If we take a look at the entire trend channel, it wouldn’t be too hard over the next few days to see even a rally as a high as the yellow or the orange-shaded area up here, closer to that blue trend line. Our first resistance that we’ll run in today, and likely be resistance for the day today, will be that green-shaded area right around the 1.2240 to 1.2288-level. That’s the green zone. That’ll be our intraday resistance. Our support, of course, is the blue-shaded area at the bottom. We’ll look for that as an opportunity.
Forex Black Book is red, so, again, if you’re looking to trade in that direction, you’d want it to go up. Green zone, yellow zone, orange zone, find resistance, start to go back down, give you a red arrow. That becomes your selling opportunity. We’ve seen many times within this downtrend channel, where it found resistance, fall, resistance, fall, resistance, fall, resistance, fall. Now what we’re looking for, if you’re going to look for a very similar price pattern, is a new resistance and a new fall in the direction of the trend. And all of that will likely change, and going back to the USDCHF also – all of that changes when the pattern of the trend changes, which is the channel that we’re seeing.
Lower highs and lower lows here on the EURUSD. If that starts to change into higher highs and higher lows, we’ll look for a change of the overall trend for the EURUSD over the coming days.
Next, let’s move over the to Greater British Pound versus the US Dollar [GBPUSD]. Here on this currency pair, we’ve been studying this period of congestion or this range that is highlighted by the blue box down there at the bottom right-hand side of the downtrend that this currency pair has been in for quite some time. Very interesting, over the past couple of days, we have finally – finally, over a several-week period – seen an open and close, clear single candle body underneath that blue box, which gives us a clue that we could be looking for now a continuation of the downtrend.
We’ve looking at multiple possibilities of our next support levels down here. The yellow zone. The red, horizontal lines down here at the bottom. Those are multiple opportunities for support. Interesting that over the past several days the Forex Black Book has turned green. I think that’s just a product of the sideways movement we saw for such a long time. With this little bit of a bearish move we see now, it wouldn’t be too difficult to see that turn back red over the next coming down.
So, let’s go ahead and zoom it in a little bit here on the Daily Chart, just so we can get a little tighter view of that range. Again, it was bouncing around in there for such a long time. This is the first time we’ve actually seen a clear single candle body open and close outside of this range since going back to the beginning of November. So, as it stands, we’re still looking for a downtrend. It’s still a downtrend. There’s no change of that trend. We would be looking for sells on rallies into resistance. It could be as high as the bottom of our channel or the range, the green-shaded area and the red trend line. That’s a possibility. That’s all the way back up towards 1.5600, so quite a ways higher than the current market value.
It doesn’t have to go all the way back up there though. It wouldn’t surprise me to see some resistance here at the blue-shaded area, just underneath the 1.5550-level. That’s the top of that blue-shaded area. It wouldn’t surprise me for us to see resistance there and it continue to drift down, down towards the 1.5450-level, and that’s the yellow-shaded area down here at the bottom.
So, over the next few days, going into next week and over the rest of this week, we’re looking at potential resistance in the downtrend at the blue and the green-shaded areas just above the current market, and our next support target, the yellow zone. If, over time, we start to see a change of the trending pattern and higher highs and higher lows develop, maybe getting above our red trend line, then we’ll look for a potential reversal for this pair, but I think we want to continue to focus our efforts in the direction of the downtrend.
One last thing here, before we move on to the next pair. Let’s take Fibonacci of the high of the red trend line, down at least to yesterday’s low. Just that little range there puts the .236 fib at 1.5555. That’s the top of our blue-shaded area. .382 sits at 1.5600, by the way. That’s at the bottom of the green zone. So, that gives us a couple of other clues or pieces of evidence of resistance into the blue zone and the green zone today for the GBPUSD.
Moving on to the US Dollar versus the Canadian Dollar [USDCAD]. That’s the next currency pair in line. US Dollar versus the Canadian Dollar. Looking at the Daily Chart, we see the rising wedge that we have been developing over the past several weeks. We are the very, very peak high of a long-term uptrend. When I call it a long-term uptrend, I’m just going to go out real quick to the Weekly Chart. You could see it’s been going up since, really, you go all the way back to 2011, the lowest low on the chart, but I think the current leg of the uptrend starts down here at the bottom of the red trend line. That’s in 2012. So, a long time this currency pair has been going up.
Is there a potential for a reversal, potential for retracement? I do think so. There’s a possibility of that, but there’s no evidence yet of that happening. We do see some hesitation for quite a long time up at the yellow zone and it’s going to need to break that yellow zone, 1.1655 or so, 1.6500 before it will go higher. By the way, just a quick reminder, and I’m just going to do a real quick reminder. Fibonacci from this high right here, where the black X is, and that’s all the way back in March of 2009, down to the low down here at the bottom, so that long-term downtrend, which was down into 2011.
So, between 2009 and 2011, downtrend. Fibonacci, high to low, there puts the .618 Fibonacci retracement level at 1.1665. Why is that important? Let’s go back to the Daily Chart. 1.1665 is the top of our yellow-shaded area. .618 fib of that long-term trend sits at the top of the yellow zone at the very top of the chart. Clear evidence of resistance, and that’s where the market has been finding resistance.
Zoom it in again here on the Daily Chart. You could see that. There’s the dashed line just at the top. That is that .618 fib and we’re finding resistance there. Buyers, in the direction of the uptrend, if you’re looking to buy this, there’s been a couple of opportunities on dips into this blue-shaded area over the past few days. That’s clearly your best and closest opportunity to buy the uptrend. The other opportunity to buy the uptrend would be a breakout above the yellow-shaded area. So, if it ever, over the next few days, breaks above 1.1665, you have a pretty good chance that it’s going to continue to pressure higher into the 1.1700. 1.1714, 1.1780 become our next potential resistance targets that we picked out in the Trade Room.
All that changes, likely changes, if we see a breakdown of our rising wedge. Breakdown of the blue-shaded area, the blue trend line, and that rising wedge, we could be looking for some further reversal here for the USDCAD over the coming days.
Let’s move on now over to the US Dollar versus the Japanese Yen [USDJPY]. I’ve been telling you this for weeks and weeks. Trade the trend. If I want to take a real good, long look at the trend, we go out here to the Weekly Chart. What’s the trend here for the USDJPY? Hopefully you’re looking at it as an uptrend, and that’s what I’ve been focusing in on in the Trade Room on a daily basis over the past several weeks.
Back to the Daily Chart, if you’ve been focusing on that trend, you probably were looking for opportunities to buy on dips into support. We studied this blue circle, the dip and the rise. We looked at it over here on the left-hand side as a similar scenario in this area right here, and I’m just going to put another circle right here. Let’s see if I can widen it out there. So, we looked at that area as another simple retracement of the long-term uptrend. If you were looking for a buy, as I did, 116.0 was the buying opportunity as it dipped down into Fibonacci. .382 fib of this last leg of the uptrend sat right there at the blue-shaded area. So, very good evidence of support there. Now it’s seen a rise from 116, back now into the 120s.
Finding resistance at the blue-shaded area at the top of the chart. That’s not too hard to see. Let’s zoom it in again. If we take Fibonacci from the high of the red circle, let’s say. The highest high on the chart, down to that low that’s in the bottom of that red circle, Fibonacci high to low puts the .786 right at the 120.50-level, bottom of our blue-shaded area. So, clear evidence of resistance there. If you’ve been buying, as I said yesterday, it’s a good opportunity to close some profit here for the USDJPY. If you’re looking for a sell, of course the closer you get to the highest high on the chart, the lower the risk is for selling and looking for further reversal for the USDJPY.
I even think as high as the 121.50 to 121.80-level, the yellow-shaded at the very top of the chart would become a better opportunity for resistance. It doesn’t mean it’s going to get up there, but at least it provides lower risk because if you sell it now, I think your risk is, at minimum, above the blue zone, but maybe even above the yellow-shaded area. Let’s zoom it down here. Let’s put one more arrow here. So, blue zone, yellow zone are our resistance. We look for a continuation of the uptrend, above the yellow zone.
If you’re looking for a buy, and let’s take this down to the 4-Hour Chart. It might be easier to see. As we get down here, there’s the blue zone. We just talked about that on the Daily Chart. There’s the yellow zone. We just talked about that on the Daily Chart. A break above the yellow zone, which is the higher high on the chart, we look for a continuation of the uptrend. I’m just going to squeeze this circle in like this to make it viewable here on the 4-Hour Chart. Back out now.
So, if you’re looking for a sell, yellow zone or the blue zone become intraday opportunities, being very cautious because you’re trading against the trend. If you’re looking for a buy in the direction of the trend, I believe the green-shaded area would be a very good place to do that. The .236 fib sits, of this uptrend from low to high, at 119.55. That’s in the middle of that green-shaded area. That becomes your first opportunity for support. .382 sits down here into the purple-shaded area down here. So, the purple zone and the green zone are our support. Obviously the blue zone is resistance. If you’re a seller or looking for reversal, the blue zone or the yellow zone become your opportunities. If you’re a buyer in the direction of the trend, the green zone, purple zone or possibly a push above the blue zone, 120.80 for the USDJPY over the next coming down.
Next, moving over to the Australian Dollar versus the US Dollar [AUDUSD]. Trade the trend. I’ve been harping on that for a couple of weeks now. If you’ve been trading the trend, profit being made as it challenges back down into the lowest lows that we’ve seen over multiple years here for this currency pair. When I say multiple years, we go out to the Monthly Chart. You could see the last time we were here, into these price levels, was all the way back here into 2010. So, it’s been quite a long time since we’ve seen these types of price levels for the AUDUSD. 2010.
Fibonacci, low to high, by the way. We’ll talk about that .618 fib that sits down into the 0.7900s here in a moment. Just wanted you to see how long it’s been since we were into these price levels. Back to the Daily Chart. Clearly it’s been in a downtrend. I’ve been telling you sell the trend. We actually have a trade here on this platform that we’ve put a few days ago. You could see the sell into 0.8185 locked in at 0.8400. Can’t lose on the trade. I suggested closing some profits if you did take that trade, but it is there. I’m just going to leave it there. See what happens on this demo platform, but selling is the main focus here for the AUDUSD.
I’m actually going to take it on down to the 4-Hour Chart here also on the AUDUSD. We could see the congestion here between the yellow and the orange zone. The sells were in the orange zone that I just showed you there, but what’s most interesting is the resistance underneath there, and I’m going to put another circle here on the chart. Just get a little circle shape and I’m going to draw it out first, and then I’ll drag it on down there.
This is what I want you to see. Right here. Let me change the color of that so it’s easier to see. Let’s make it the blue color. And as we change that to the blue color, that’s what I want you to see. Note here what happened when it got under the orange zone. What did it do? It found resistance. Once it got underneath it, it found resistance under the orange zone. Let’s draw another one out because I think this is going to be very interesting as you look for opportunities in the direction of the trend. Draw another one out. What happened when it got underneath here and stayed underneath the pink zone?
It continued to find resistance and eventually went down. So, you see the resistance here. The fall. The resistance here. The fall. So, what are we looking at right now? I’ll just drag this one on down there, so you could see. We’re looking at resistance underneath the yellow-shaded area. We do see a very close support into the blue zone, but I do think that if you’re going to do anything today, I’m going to get this out of the way real quick. If you’re going to do anything today and over the next couple of days, you’re still focused your efforts in the direction of the trend. The yellow zone. I don’t think I would buy it as long as it sits underneath there. It’s more likely a sell. You’re targeting the blue-shaded area here as your intraday targets. The only reason to change that attitude would be a push above the yellow zone, 0.8145.
Squeeze it in just a little bit. I wanted to show you two things. Under the blue-shaded area, your next targets would be close to the 0.8000-level. 0.8012, and there’s that .618 fib from the Monthly Chart. 0.7944 is all the way at the bottom of the chart, so that definitely becomes a potential target in the direction of the trend. Forex Black Book still showing red, so all of that still pointing to a bearish trend for the AUDUSD.
Lastly, the New Zealand Dollar versus the US Dollar [NZDUSD]. Lots of stuff to talk about here. I don’t think this is a sell opportunity at the current moment. More likely, we’re watching for support here into the blue-shaded area. This is the Weekly Chart, by the way. Left-hand side of the chart, we see a lot of support. Right-hand side of the chart, a lot of support. As long as it stays within that blue-shaded area, I don’t think this is a good sell. I think you have to wait for it to either go back to resistance to sell it or break through the support. So, keep that in mind. Blue-shaded area, historical support, going all the way back into 2013.
Take it on down to the Daily Chart. We’ve been finding support even over the past multiple weeks. We’re going all the way back into September. Support into the blue zone. So, terrible place, in my opinion, to sell this right now. I think, more likely, you’re looking for intraday support, which we’ve seen over the past week or so. Only if it opens and closes, clear single candle body, underneath 0.7675 and that blue-shaded area do I expect it will continue to go lower. So, it needs to break underneath the blue zone to go lower. Otherwise, we’re finding support on top of it. Resistance is the green-shaded area and the green trend line. That’s not too hard to see there, is it? Green-shaded area. Green trend line becomes your resistance and a better selling opportunity, by the way, if you’re going to trade the NZDUSD.
Squeeze it in just a little bit. Your support, or next support, I would say, if it breaks through the blue-shaded area would be all the way down here into the 0.7580-level. The yellow-shaded area. Red trend line of the channel sits down there. The historical support sits down there. That’s your next best place to sell it.
Take it on down to the 4-Hour Chart. Zoom it out here. We know the green zone is your next resistance. We know, if it holds here, it goes back up. If it breaks here, it goes back down. That’s not too hard to see there. Squeeze it in. There’s your support. Above the green-shaded area, let’s put this in there too. Above the green-shaded area and green trend line, we’ll look for the blue trend line, which is the top of our trend channel, and the yellow-shaded area to be our next target, but that’s going to take a serious push to get it above that green zone.
So, green zone: resistance. Blue zone: support. Break of the blue zone goes lower. Holding the blue zone potentially rallies back to the green zone. The trend is down. Continue to focus your efforts in the direction of the trend.
So, that’s your kind of a quick wrap up for the week of the seven major currency pairs that include the US Dollar. Again, we will not have a video or Trade Room over the next couple of days. Christmas Day, and then on Friday. We will be back on Monday. I look forward to seeing you back in today’s Trade Room for another quick wrap up later on today.