Analysis on 3-hour chart for clarity :
EURUSD has been in a large range 1.1508 to 1.1750 since May 23, 2018
Major Resistance area = 1.1718 ---- 1.1750.
Number of bounces off this area = 9 times
Number of piercing or breakthrough = 2 times
Major Support area= 1.1508 ---- 1.1539
Number of bounces off this area = 4 times
Number of piercing or breakthrough = 1 time
Looking at the EURUSD past for the last 3 months .
Fundamentals :
--- EU data is still soft compared to US data
--- Turkey, ITALY, and Argentina or in general contagion from EM markets Currency turmoil
--- Stronger US dollar
--- Rising US 10 Year yield to above 2.900%
--- NAFTA talks are positive for US Dollar
--- Tariffs on EU products is a negative for EURO
Rumors:
---- Possible Brexit deal , well it seems to be just a rumor from Bloomberg. The GBPUSD shot up 200 pips to 1.2982 and then collapsed to 1.2871 and now at 1.2897 . it dragged EURUSD with it to 1.1640 but now at 1.1623
What i see : EURUSD has not made a higher high since that time. There is no follow through indicating a strong bullish bias.
The EURUSD bulls ( US Dollar bears ) have been trying to get out of their positions after the relief rally, so i suspect .
1. Either continue the relief rally and retest 1.1640 and breakthrough towards the major resistance area 1.1718 - 1.1750 or
2. We go back and retest 1.1508 Area .
IMO!!!!!! ----- The more likely path according to fundamentals is to drop and retest 1.1508 area and probably break it or bounce again
My possible trade:
Medium-term SHORT:
Entry: Anywhere 1.1625 to 1.1665
Exit 1: 1.1540 area ( Exit 3 lots )
Exit 2: 1.1508 area ( Exit 2 lots )
Size: 5 Lots
Cancel trade if prices go above 1.1685 from now or US Dollar index breaks below 95.00 Level and goes below 94.87
EURUSD has been in a large range 1.1508 to 1.1750 since May 23, 2018
Major Resistance area = 1.1718 ---- 1.1750.
Number of bounces off this area = 9 times
Number of piercing or breakthrough = 2 times
Major Support area= 1.1508 ---- 1.1539
Number of bounces off this area = 4 times
Number of piercing or breakthrough = 1 time
Looking at the EURUSD past for the last 3 months .
Fundamentals :
--- EU data is still soft compared to US data
--- Turkey, ITALY, and Argentina or in general contagion from EM markets Currency turmoil
--- Stronger US dollar
--- Rising US 10 Year yield to above 2.900%
--- NAFTA talks are positive for US Dollar
--- Tariffs on EU products is a negative for EURO
Rumors:
---- Possible Brexit deal , well it seems to be just a rumor from Bloomberg. The GBPUSD shot up 200 pips to 1.2982 and then collapsed to 1.2871 and now at 1.2897 . it dragged EURUSD with it to 1.1640 but now at 1.1623
What i see : EURUSD has not made a higher high since that time. There is no follow through indicating a strong bullish bias.
The EURUSD bulls ( US Dollar bears ) have been trying to get out of their positions after the relief rally, so i suspect .
1. Either continue the relief rally and retest 1.1640 and breakthrough towards the major resistance area 1.1718 - 1.1750 or
2. We go back and retest 1.1508 Area .
IMO!!!!!! ----- The more likely path according to fundamentals is to drop and retest 1.1508 area and probably break it or bounce again
My possible trade:
Medium-term SHORT:
Entry: Anywhere 1.1625 to 1.1665
Exit 1: 1.1540 area ( Exit 3 lots )
Exit 2: 1.1508 area ( Exit 2 lots )
Size: 5 Lots
Cancel trade if prices go above 1.1685 from now or US Dollar index breaks below 95.00 Level and goes below 94.87
Comment:
A clear indicator is when the EU data is soft or worst but EURUSD rises then you know there is EURUSD Bulls trying so had to push the EURUSD up no matter what the data says.
In most cases the EURUSD drops big time after that. Currently i think it was the EU-UK Brexit rumors and the today's Weaker USD that caused the rise of the EURUSD and also being dragged up along by the Cable (GBPUSD ) .
For now , let's see if EURUSD breaks 1.1670 barrier or drops again
US Dollar index is heading back to the 95.00 Level again . So long as its not below 94.80 area then we should be good for DXY rebound
In most cases the EURUSD drops big time after that. Currently i think it was the EU-UK Brexit rumors and the today's Weaker USD that caused the rise of the EURUSD and also being dragged up along by the Cable (GBPUSD ) .
For now , let's see if EURUSD breaks 1.1670 barrier or drops again
US Dollar index is heading back to the 95.00 Level again . So long as its not below 94.80 area then we should be good for DXY rebound
Comment:
We are stuck in a EURO Queen & Dollar King dance for the last 2 days . We go up and down but come back to the 1.1622 area while DXY comes back to 95.00 Level and none is willing to give up .
But at some point either EURUSD Bulls ( USD bears ) or EURUSD Bears ( USD Bulls) will have to give up, who will it be ? . i don't see us being in this tag of war for long time
But at some point either EURUSD Bulls ( USD bears ) or EURUSD Bears ( USD Bulls) will have to give up, who will it be ? . i don't see us being in this tag of war for long time
Comment:
There is something happening underneath the price action in the past 3 days
EU data has been really soft but the EURUSD keeps grinding up . Which tells me something is about to happen.
We either breakout and continue the UPTREND or collapse
EU data has been really soft but the EURUSD keeps grinding up . Which tells me something is about to happen.
We either breakout and continue the UPTREND or collapse
if EURUSD hits 1.1685 or US Dollar index DXY stays below 94.87 then cancel the above trade .
Right now my trade was triggered at 1.1655 , i will be cautious change the exit strategy a little
Exit 1: Move trailing stop to 1.1625 area ( Exit 5 lots ) and wait for a bounce to reenter another sell or stay out until the rally fails
Exit 2: Move trailing stop to 1.1600 area ( Exit 5 lots ) and wait for a bounce to reenter another sell or stay out until the rally fails
Exit 3: Move trailing stop to 1.1550 and exit at 1.1540 area ( Exit 3 lots )
Exit 4: Move trailing stop to 1.1515 and exit at 1.1508 area ( Exit 2 lots )
Only enter a buy if EURUSD is above 1.1685 and has strong bullish trend
NOTE: we are still in the Major Channel that we entered in May 23, 2018 and we are stuck until we break out of it