EURUSD Trade

[phillo]

1st day of the month + potential "Brexit Deal" news , maybe helping this one. I really thought it may have gone slightly lower !

[Mercury]

I see it a bit differently @elle, but "horses for courses" and all that.  For me it is telling that there was no significant news at the Wave B bottom out (also on GBP, also Wave 1 bottom on AUD) and also none on the breakout through resistance on all 3.  I think it was just a case that these markets got to a level where traders saw room for upside and wanted to buy and/or it is more about the USD than the EURO or any of the others...  I find it impossible to tell what's driving short term moves on these markets (I stick to the macro big picture for Fundamentals), the so-called experts will be falling over themselves to find explanations, of course if they don't they will be out of a job...  For me I don't need to know I just need to trade what I see ?  

[phillo]

well, if history repeats ......................... long EURUSD !

[Mercury]

Yes absolutely for me.  I am already Long though and looking to run this up to a suitable retrace level, as mentioned before.  My target is 12,300 but may exit a bit earlier than that and wait for what I think will be a bigger bear move next that would break the recent support levels.  To confirm this I am looking for a short term retrace on this current rally then turn and rally away.  Let's see...

 

[Mercury]

So looks like the retrace is well on and at this point I am looking for a deep one to the Support zone associated with my 4 hourly chart Triangle breakout (around the Fib 76/78% on the recent rally.  The rally was in a 1-5 form so I am expecting this to be a retrace and not a return to the Bearish trend. However the Daily Triangle, if valid, did contain the price action, albeit with a very large spike through and so a break through Support levels at 11,300 will give pause for a reconsideration.  GBP is holding up better and AUD is also strong, in expected retrace at present.  Will be interesting to see if these markets all hit turning zones at similar times and what happens re price action.

I am cautiously optimistic for the USD bearish move to continue after this retrace.

Anyone care to share their opinion?

 

 

[Mercury]

PS: the Fib 50% and 62% levels cannot be ignored, these are the most common retrace turning points and a break back above the Daily Triangle line would of course be bullish

[Mercury]

Market has recently bounced off the Fib 62% in retrace turn (can't rule out a retest of the lower level but for now this looks good for a sustained rally).  I have a better Daily chart Triangle now, which if broken through (plus over head resistance zone) will be strongly bullish in my view.

 

[Mercury]

A breakout through the Daily Triangle overnight, with an immediate volatile retest and rally away bring the market to ST resistance.   I am Long from the 4 Hourly chart Triangle breakout and the associated Fib 62% retest and the Daily Triangle breakout and looking to add an other Long on the resistance breakout to leverage what I believe will be a strong rally phase towards the Weekly chart breakout down zone.

 

[Mercury]

Market retrace and retest of the Daily Triangle in classic chartist fashion.  I am Long off the bounce, should be a strong rally.  I have stops below the Triangle line (appropriate prior low) to guard against another retest but so far this is shaping up well.

[Mercury]

Quick update.  Looks like another retest of the daily Triangle.  I'm looking at around about 11,400 at the zone of interest here. Strong confirmed break through to the downside calls any rally into question.  Strong rally off this zone means the retrace rally is still a likelihood.

[Mercury]

So that Daily Triangle was bogus, that will teach me to use other peoples analysis... (Nvmd, live and learn, again!).  The market has come all the way down to retest the 4 hour chart triangle and has bounced away into a rally off this crucial area of support.  Whether this will be a short lived pause of the rigger for a major push up remains to be seem.  Any Longs should have tight stops in my opinion as the overall big picture trend is down.  Trading a retrace against the trend is always fraught with risk, and this one is especially so.  Still the pointage potential on offer in the short term is work the small loss I will suffer on my Long positions so I am comfortable with this for now.  I would expect a small 1-2 rally and retrace before a longer rally to confirm this turn and then we will see about breaking out through overhead resistance.  A break down through the long term support area just below brings up the need to reevaluate the big picture (no necessarily a definite fill your boots on Shorts BTW...)

[Mercury]

So the market tested the support area again and then turned away but not convincingly.  Is it possible for EURUSD to rally while others are falling?  Yes of course but all these markets have been in such tight lock step for so long it is hard to imagine it and yet the Euro has been weaker of late so could easily become stronger for a while.  EURGBP has broken out of a potential ending Triangle and is nudging the underside of overhead resistance (see separate thread for details) so a rally from here is eminently possible.  Any Longs can have close stops below the recent lows (blue B) as a breach of this zone (actually the green line where the last but one low and turn was) requires a full reassessment so no point in holding, fast scratch is the order of the day.

I am already Long from point B (blue) with close stops below so I would only look to add to this if I see the market rally from here through ST resistance (say 11,380) where I can place another close stop trade (approx 60 points wide) below the current turning point.  My medium term road map is suggesting circa 1,000 points on offer if this rally scenario holds vs 60 points loss risk.  Not bad...  However as this is a counter trend rally type of set up the odds are evens at best that there is another leg down before a rally OR that the EW1-2 rally has already happened (very shallow) and a major Bear trend move is set to resume.  Still I am content to take a small loss for the chance of a very large short term (2-3 weeks) gain.  I am concerned about other USD pairs falling against the USD but buoyed by the price action on EURGBP.  Let's say 50/50 at this juncture, or a little better, which is all I need for such a small outlay, but overall the set ups on GBP and AUD are medium term bullish so even if EUR drops another leg it could very well put in the retrace rally after that.  I will be watching the opening on Sunday evening and Monday morning closely for price action signals to justify another Long (or to trigger a full reassessment). 

 

[Mercury]

The EURUSD version is a little trickier than than GBP or AUD because it is not a retrace move (no Fibs of near term support zones) and the bearish move is in the direction of the long term trend, so harder to call a turn.  Nevertheless there is long term support and all other signals are good.  A breakout of the channel is a decent long position.  I would keep close stops just below previous lows but you could drop this below the Monthly Fib if you wanted to give more room to guard against another leg down.  For me, on this pair right now, I'd rather scratch quickly.  Another options is to wait for a retest of the channel breakout BUT if this is a significant rally against the USD that may never happen.  There will be a 1-2 retrace at some point though and that offers another chance if this one is too risky.  In any case I would only go Long on a break above 11260.

[Mercury]

EURUSD eventually did turn at the support point and is now at another important juncture.  Will the market follow AUDUSD and breakout through the Daily chart channel line.  If it does then a fast move to the 11,800 resistance zone is indicated and then we should either get a retrace or some consolidation before a final push on towards the 12,300 area I have been targeting for the full retrace rally completion.

With EURGBP having made the projected rally back off the LT support area it could now also be time for GBPUSD to play catch up and this one is likely to be stronger than EURUSD.

I am already long EURUSD but if I wasn't or was minded to take a ST trade to collect the 400 or so points on offer I would look to go long off the breakout.  However GBPUSD offers greater reward, albeit with potentially greater volatility risk.

 

[Mercury]

Certainly plenty going on with Stock, Oil and Cryptos to keep everyone occupied but what of FX?  I think I had mt channel lines drawn incorrectly on EURUSD and now with another top and turn I have a better set (price discovery?  they go that bit right!).  Price remains contained within the channel for now but the rally up was in a 1-5 pattern, which would lie with the short term trend so a retrace and then retest of the upper channel line is indicated.  However we could also see another leg down to the bottom of the channel.  Best areas to watch are the Fib 62% and 76/78 for a retrace termination and rally and price action around either channel boundary is obviously of interest.

[Mercury]

Is my EURUSD retrace finally about to break Long?  The current retrace dropped to the Fib 62% zone and turned with PMD.  Now looks like a small 1-2 (similar on GBP) and if this continues with new higher highs and breaks the daily chart channel line then the full retrace move is on.  This is coincident with a rally on stocks (and Oil maybe too now...).

[Mercury]

Daily channel breakout in progress (needs a close above the channel line to confirm.  Got to watch out for a retest but this looks to be a wave 3 so could easily hammer on up to a probably wave A completion at major resistance.  At this point I would expect a wave B retrace back down before a final wave C to complete the counter trend move and the Bear, Bear, Bear.

 

[Mercury]

After an initial fakeout, it looks like this pair is setting up to finally rally.  This bearishness in the USD could also be the initial catalyst needed for precious metals to get a rally going.

[Guest ertankutlu]

22 hours ago, Mercury said:

After an initial fakeout, it looks like this pair is setting up to finally rally.  This bearishness in the USD could also be the initial catalyst needed for precious metals to get a rally going.

according to this graph usd will lose value.

[Mercury]

I have a correction on my Daily chart, which only strengthens my medium term projection for a rally in EURUSD.  The channel formation I had was bothering me so I looked at it again from a blank sheet of paper perspective and found what I think is a better set up, a Triangle formation to end the Wave 1 (Pink) move.  This Triangle has been broken and retested and has slowly moved up from there but has been sluggish.  This is mirrored in a retrace bearish move on AUDUSD and consolidation at a marginal position (along support levels) on GBPUSD.  Sill the outlook remains for a rally against USD in all three and on EURUSD in particular there have been a series of higher highs and lows since the Daily Triangle retest, which is bullish in nature, if not conclusive.