Introduction:
Please read the full post before considering taking action.
This past month has been quite a ride for anyone involved in the forex markets. To an extent, it showcased the necessity of allying our technical analysis with a more proper assessment of the political landscape. While a stable market provides us with reasonably well-determined supply and demand zones for each currency, facilitating our job in forecasting zones of interest, the immediacy of moves caused by governmental agents' announcements sometimes blow it out of the water.
EUR was erratic following the elections in the eurozone, while USD has been stumbling on Trump's decisions on his trade war with China. The USD is also strongly correlating with the stocks markets and, when feelings are bearish, the dollar suffers with it.
Nevertheless, the charts have been showing us that technical analysis is still applying to this particular pair and we should play this descending channel once more.
On the charts we can see that a descending channel has formed since the sideways formation broke in early 2019. Lower highs and lower lows indicate we are still on a downtrend. Although it has been going on for quite some months, we have no reason to believe it will break now. Specially since price usually follows the path of least resistance.
How to Proceed:
Our team has already opened a short on 1.13 and just opened another one. We also opened a hedge long here. Should the formation break, we will follow the plan highlighting the dotted arrows.
Take Profit:
Our main target is 1.12. It failed to create a lower low there, but it could happen now. Those targets, however, can be dynamically changed, i.e., according to live price action, should circumstances vary.
Stop-loss (Invalidation of Analysis):
Our stop-losses here, since swaps are positive, are on the 1.135 level.
Risks Involved and Key Events to Tune Yourselves to:
A resolution on the US-China trade will certainly move the markets. Keeping track of a forex calendar is also of extreme importance here.
ETA on This Trade:
According to the ATR and for how long these waves play out, we are expecting to hold these positions for at least 3 weeks. It can take more or less time, depending on the market's reaction.
Side-notes:
Please keep in mind that the markets have been reacting strongly to news these days, which could further create instability. We are trading the whole forex system here, not only a pair. These positions should be watched closely.
Please leave your comments below to inspire us to continue our work and don't forget to follow us! Feel free to send us a direct message with any doubts you might have and experience a great trading session!
Please read the full post before considering taking action.
This past month has been quite a ride for anyone involved in the forex markets. To an extent, it showcased the necessity of allying our technical analysis with a more proper assessment of the political landscape. While a stable market provides us with reasonably well-determined supply and demand zones for each currency, facilitating our job in forecasting zones of interest, the immediacy of moves caused by governmental agents' announcements sometimes blow it out of the water.
EUR was erratic following the elections in the eurozone, while USD has been stumbling on Trump's decisions on his trade war with China. The USD is also strongly correlating with the stocks markets and, when feelings are bearish, the dollar suffers with it.
Nevertheless, the charts have been showing us that technical analysis is still applying to this particular pair and we should play this descending channel once more.
On the charts we can see that a descending channel has formed since the sideways formation broke in early 2019. Lower highs and lower lows indicate we are still on a downtrend. Although it has been going on for quite some months, we have no reason to believe it will break now. Specially since price usually follows the path of least resistance.
How to Proceed:
Our team has already opened a short on 1.13 and just opened another one. We also opened a hedge long here. Should the formation break, we will follow the plan highlighting the dotted arrows.
Take Profit:
Our main target is 1.12. It failed to create a lower low there, but it could happen now. Those targets, however, can be dynamically changed, i.e., according to live price action, should circumstances vary.
Stop-loss (Invalidation of Analysis):
Our stop-losses here, since swaps are positive, are on the 1.135 level.
Risks Involved and Key Events to Tune Yourselves to:
A resolution on the US-China trade will certainly move the markets. Keeping track of a forex calendar is also of extreme importance here.
ETA on This Trade:
According to the ATR and for how long these waves play out, we are expecting to hold these positions for at least 3 weeks. It can take more or less time, depending on the market's reaction.
Side-notes:
Please keep in mind that the markets have been reacting strongly to news these days, which could further create instability. We are trading the whole forex system here, not only a pair. These positions should be watched closely.
Please leave your comments below to inspire us to continue our work and don't forget to follow us! Feel free to send us a direct message with any doubts you might have and experience a great trading session!
