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I’m going to get started today on the Euro versus the US Dollar [EURUSD]. I want to start out here on the Weekly Chart because we are reaching into price levels that we haven’t seen in quite some time and we need to get a longer perspective of this currency pair’s history. We go back in time.
First off, the pink-shaded area. We studied that yesterday in the Trade Room. Follow that back in time. You could see the historical supports that we see here, back in 2013, inside that pink-shaded area, above the 1.2700-level. We could see that last major support back here into 2012, inside the little blue box on the left-hand side. That was the last time we really challenged and tested the 1.2700-level. And then prior to that we were underneath 1.2700-level.
Take a look at the last time we pushed underneath it, and that’s all the way back in 2012. May of 2012 we pushed underneath 1.2700 and went all the way down to this yellow-shaded area that sits down here into the mid-1.2400s. And we looked at that during the Trade Room yesterday; at the next potential target if we broke through and satisfied a breakout underneath 1.2700. And so, you come back to the current timeframe and you could see the current price is now underneath 1.2700. So, there’s a clear expectation that we’ll look for a continuation of the downtrend, until we reach the next support, which is down here into the 1.2400-level.
Now, this is the Weekly Chart, so what we’d look for of course is for this current weekly candle to stay underneath 1.2700. If, by the end of week, the current weekly candle gets back above 1.2700, that may change the picture, but for now we’ll look for it to stay underneath 1.2700 and continue targeting back down here towards the 1.2400-level because that’s what happened back here in history. And the last time we were here we didn’t get under, but the previous time, when we did get under, we saw it push all the way back down here into the yellow-shaded area.
So, that’s the viewpoint from the Weekly Chart. Now let’s go down to the Daily Chart, and you could see yesterday. Yesterday’s candle did open and close, and we talked about this in the Trade Room yesterday that if we saw yesterday’s candle open and close, and that’s that little, small candle right here that I’m circling with my cursor. That’s that little, small candle. If we saw that candle open and close, which it did – it opened and then it closed – then that gives us confidence in the continuation lower. And as soon as we saw that next candle open here underneath 1.2700, we knew that there was a greater expectation that it was going to continue to fall, and that’s exactly what’s happened so far here for the EURUSD.
It doesn’t mean it’s going to continue to fall, but that was the expectation once we saw that open and close. So, for now, now that we see that open and close underneath 1.2700, that becomes our resistance. So, if you’re looking to sell this, I don’t really recommend usually selling at the bottom of a trend run. I usually look for opportunities to sell on a breakout of support, which we’ve already seen with yesterday’s open and close under the pink zone, or a challenge of that historical support, now going to be resistance. So, if you’re looking to sell this currency pair, I think it needs to go back up.
I think it needs to go challenge 1.2700-level, the pink-shaded area, the blue trend line before you would look to sell it, and that’s really an example of what you see underneath this blue zone. You see the breakout, test of the green zone, challenge of the blue zone as resistance right here, under the blue trend line, and then it fell back down. Same thing here. Got underneath. We would’ve expected a push back to the green zone, which you see right here, and then it went down. So, usually what I’m looking for is the breakout, which we see, but then a retest of that pink-shaded area as resistance for a selling opportunity.
Selling at the bottom of a long candle like this doesn’t give you a great risk-reward opportunity. Now, if it doesn’t go up, you could speculate and sell it, but your risk is much higher. If you wait for it to go up, your risk becomes much lower for selling opportunities on the EURUSD. Otherwise, really I think the best opportunity right now would be waiting. Waiting for it to reach all the way down here and looking for clues to support and reversal. Now, it doesn’t have to reach all the way down there. We could see reversal before reaching there, but I think those two areas, the pink and the yellow, are really the best opportunities to look for new trading opportunities with lower risk and higher potential reward right now for the EURUSD.
Hopefully somebody was able to get in on that sell on the open and close breakout under the pink zone and 1.2700 and now is following profit now that we’re challenging back into the 1.2500s, here in between the pink and the yellow-shaded area. We’ll go back in time and study this zone between the pink and the yellow-shaded area later on in the Trade Room, so hopefully you’ll join me then.
Let’s take this information down to the 4-Hour Chart. And as we get down here to the 4-Hour Chart, there’s the breakout. And we talked about this yesterday in the Trade Room. There’s the open and closes on the 4-Hour Chart, there’s the retest underneath 1.2700, and there’s the fall. So, hopefully, again, I’m hoping that somebody in the Trade Room was able to sell this currency pair underneath 1.2700. There was multiple opportunities over a several-hour period, underneath 1.2700 with the open and close, retest. I talk about this just about every day in the Trade Room, and now we’ve seen the fall.
So, if you were looking for an opportunity to sell it, that was it. You’ve missed it if you didn’t do it at that point. Don’t worry about this green arrow. It’s just showing you that little period of congestion right there. The Forex Black Book trend bar is red. You’d only be looking for selling opportunities. I don’t think you’re going to get one anytime soon, unless it makes a challenge or rally back towards the pink-shaded area. So, at least at this point I don’t think there’s any opportunity to see new buy or sell opportunities with the Forex Black Book, until we see some sort of retracement higher, likely at least back towards the blue trend line and the pink-shaded area.
So, for the day today, it’s easily determined that your best selling or buying opportunities would be the pink or the yellow-shaded area. Again, we’ll study this zone between there. There’s got to be some historical support, congestion, and resistance between there, but it’s going to be very difficult to find because we have to go all the way back multi years because we haven’t been down in this zone for multiple years here for the EURUSD. So, watch for the pink. Watch for the yellow zone. And later in the Trade Room, we’ll study that zone between there for the EURUSD today.
Next moving over to the US Dollar versus the Swiss Frank [USDCHF]. Well, this currency pair just continues to be bullish. Continues to move higher. Broke through the blue-shaded area that we discussed yesterday at 0.9500, and now we’re challenging and testing underneath the 0.9600-level.
That’s expected. We’ve looked at this Fibonacci over the past few weeks. High to low of the blue trend line zone. High to low with Fibonacci puts the .786 fib right at 0.9594. Guess where the current market came to a stop. Right at that .786 fib at 0.9594, underneath that purple-shaded area. We look back in time. Historical resistance back here. We knew if it got above the blue zone, purple zone was your next shot for resistance. So, that’s where we are right now, sitting at resistance into the purple-shaded area.
Clearly a breakout above there, we’ll look for it to go higher. Where does higher go? That’s a good question. We could at least maybe look for it to go back up here into this area, and I’ll go ahead and highlight that also. Let me just pull this highlight area up here like this. Just bring this yellow zone into view. That yellow zone becomes likely the next potential resistance zone, and that’s into the 0.9800-level. So, quite a ways up if we break through the purple zone.
We’re nowhere near that, but at least we know where it’s going if it breaks through that purple-shaded area. So, for the day today, resistance: 0.9600, 0.9650. That’s the purple zone. Support of course is now the blue zone, which was yesterday’s resistance. The yellow zone of course would be your next resistance. Let’s look at the Forex Black Book. It’s green. That’s not too hard to see. We’re going up.
Take it down to the Daily Chart. You could see there’s the push above the blue zone. Never really gave you an open and close like the EURUSD did, but just continued to pressure higher, all the way back up to the purple-shaded area. If you’re looking to buy this today, I don’t suggest buying it right now. You’re into resistance. You’re into Fibonacci. I don’t think this is a good buying opportunity. I think, if anything, this becomes a potential resistance and reversal opportunity for the day as long as it stays underneath that purple zone. A breakout above 0.9650 or so, above the purple-shaded area, you will look for the continuation higher.
Take that information down to the 4-Hour Chart. And as you get down here, well, there you go. Right there on the 4-Hour Chart there was the breakout above the blue zone. I always say within or above an area of resistance, you look for the continuation higher, and that’s exactly what happened. So, if you were looking for anything yesterday, it was the breakout above the blue zone. Here on the 4-Hour Chart, a continuation of the uptrend as it pushed towards the purple-shaded area. Until you see something like this above the purple zone, I don’t think this is a good buying opportunity. I think at least at this point on an intraday basis you’re looking for resistance and reversal under the purple zone to go back to the blue zone as your next support. A breakout above the purple zone is the risk and you look for a continuation of the uptrend. Forex Black Book. No chances of getting a new buy signal at least at the current moment for the Forex Black Book on the USDCHF today.
Next, moving over to the Greater British Pound versus the US Dollar [GBPUSD]. This pair I think is the hardest pair to read at the moment because it’s in a period of struggling. You have the downtrend. The bearish, blue downtrend line. You have the fact that we’ve seen historical support into the blue zone, the congestion between the green and the orange zone. There’s fundamental reasons for this to go up. There’s sentiment to go down. There’s just a lot of battles going on here on the GBPUSD, and I think it’s probably the most difficult one to read at the current moment.
Anyways. We take a look at it. We look between the orange and the green zone. I’ve said this for the past few days. If it opens and closes under the green zone, you’re probably looking for it back down here towards the blue-shaded area, which is your next barrier for support. If, today, we get back above the green-shaded area and the blue trend line and the red trend line, we’re probably going back up towards the orange-shaded area, maybe even the pink-shaded area, but we’ll look at the orange one first as our next potential resistance.
So, green zone will kind of be that decision zone that we’re going to watch today, between the 1.6200, 1.6260-level. That’s the green-shaded area. Let’s go ahead and take it down to the 4-Hour Chart. We could see the spike underneath here. Again, I don’t consider that a breakout. It’s a push, a challenge, a test. I mean you could even see that it did that over here on the left-hand side and turned right back around. So, it’s just a challenge. It’s just a test. I would look for the open and close underneath there to feel more confident in it, but it could just go down without that open and close.
If you’re already in a sell from maybe the 1.6260s or 1.6270s, then of course you’re following profit. Now protect that profit if you’re in a sell. Target the blue-shaded area. If you’re not in a sell, I’d probably wait for the open and close breakout underneath the 1.6200-level, and then you look for the continuation down to the blue zone. If it gets, today, back above the green zone, clearly we’re looking for this to go back up.
Forex Black Book is red. Apparently didn’t stay sideways long enough here in the green zone to give us a new red arrow, so at least at this point it would need to go back up to give us a new red sell arrow. So, anyways. Back up here towards the top of the green zone might be a possible sell. Open and close underneath 1.6200, a possible sell, but at least at this point I don’t see any reason to sell it other than speculation that it could continue to go lower. Wait for it to open and close underneath here before you sell it. Buyers are just being patient. If you’re looking to buy this, the blue zone or back above the green zone. That’s really the only reasons you would look to buy the GBPUSD today.
Next, moving over to the US Dollar versus the Canadian Dollar [USDCAD]. Clear decision zone here being reached right now for the USDCAD. The blue-shaded area here. And why is it so clear? That’s multi-year highs. I mean we haven’t seen this high, well, since the beginning of the year, but prior to that, multi years back we haven’t been into this 1.1200-zone for the USDCAD.
So, you could see how important the blue-shaded area is here on the Weekly Chart, the Daily Chart, historical resistance back in the beginning of this year. January, February of this year you could see the resistance. I really don’t think that this is a good opportunity to buy this currency pair. Given the history, given the long-term resistance, I just don’t think this is a good opportunity to buy this pair. The only reason I would consider buying, and I know the trend is going up, and we’ve talked about buying this pair over the past several weeks, back down here into the blue and the pink-shaded area, but I just don’t think this is your opportunity to buy it.
I think if you’re doing anything, you’re watching for resistance and reversal because that’s what happened the last time we were here in January and February of this year. The only reason I would consider a buy would be a breakout of 1.1230, 1.1240. The breakout of that blue zone. That’s really the only reason to buy this, or a dip to support, which would be the yellow zone. So, these three arrows are probably telling the story here for the USDCAD. Within or below that blue zone, it falls back to the yellow zone. Above the blue zone, not within it, but above the blue zone, we look for the continuation of the uptrend.
I do think that’s the trend direction, but we look for a continuation above the blue zone. Very difficult spot right now to consider that. Yellow zone becomes your buy into support. Remember buy support, break resistance, or sell resistance, break support. Right now we’re in that resistance zone, so I just don’t think this is a good opportunity to buy this currency pair.
Take it down to the 4-Hour Chart. It doesn’t change it at all. We’re seeing a little breakout of this period of congestion. I suppose if you’re doing anything, it would be a buy. 1.1160 or so on the breakout of this little period of congestion. If I take a little box here, let’s see. Get this box right here. If you look at this little box, purple box right here, you could see that’s that period of congestion highlighted in that purple box. Let’s make it a box. Like this. You see that little purple box right there.
If you’re doing anything today as a buy scenario, it would likely be just on top of 1.1165. Just on top of that purple box. So, you’d use 1.1165 as your breakpoint. You look to target back to the top of the blue zone. So, 1.1165 to 1.1240, 1.1230, somewhere in that area becomes really the best opportunity if you’re looking for a buy today. I don’t think it’s there. I don’t think it’s opened and closed above there enough for me to feel confident in calling that buy yet. It’s a false breakout so far. Only an open and close above there gives me confidence in that.
So, be careful about buying it until you see the open and close above 1.1165, but I think if you’re going to buy it, that’s probably your best opportunity. Otherwise, underneath this purple box, we’re back here to the yellow-shaded area for the USDCAD today.
Next, moving over to the US Dollar versus the Japanese Yen [USDJPY]. And it continues the uptrend. That’s really the directional purpose that we’ve been talking about. The uptrend. And I’ve been talking clearly about the pattern of the trend. What’s the pattern of the trend? We see uptrend, congestion, first box. Uptrend, congestion, second box. Uptrend, congestion, third box. What are we in right now? Uptrend. We’re continuing that bullish trend, breaking out of 109.40 and we’re continuing to pressure higher.
The resistance zone that we have picked out now. The last resistance zone I have picked out right now is 110.04 to 110.50. We’ll call it 110 to 110.50. That’s that purple-shaded area. The closer it gets, right now we’re at 109.83. Current market price here at the video. This is of course your resistance. I don’t think I would buy it underneath 110 because there’s likely resistance there. Breakout of that, of course we continue to go higher and we’ll have to pick out a new higher target in the Trade Room later today.
If you’re looking for a buy scenario, I think it would be likely back on top of this blue box and back towards the mid-109s, 109.40, 109.50. That would be your best buy scenario. Let’s take it down to the 4-Hour Chart. And there’s the push through the blue box. We talked about that a little bit yesterday during the Trade Room. If you’re looking for support, it’s back on top of this blue box and on top of the 109.40, 109.50-level. Resistance is clearly here at 110. It’s likely resistance at 110. A breakout above that we look for the continuation higher, but be very cautious right now about buying the closer it gets to 110.
You know, right now you’re only 18 pips away from 110, so there’s very limited profit potential. Buy low, sell high tells you your best profit potential, and right now you’re at the very highest peak of this trend, so it doesn’t become the best buying opportunity. I think a dip back to the yellow zone becomes a better buying opportunity here for the USDJPY today. Otherwise you’re looking for resistance and potential congestion and reversal from the 110, 110.50-level, the purple-shaded area, and we’ll look for the next higher target during the Trade Room later on today.
Next, moving over to the Australian Dollar versus the US Dollar [AUDUSD]. Breakout. We’re looking at the breakout or potential breakout here for the AUDUSD. First off, let’s go out a little bit further. Let’s just zoom it out here. The pink-shaded area. Very interesting. We talked about this blue box yesterday. No open and close underneath it back here in the blue box, under the pink zone. Now we’re seeing potential for that to happen.
We see an open underneath it. We did that over here too. Remember? We saw an open underneath it. It got right back above the pink zone. So, watch for the end of day today. If, by the end of day today, let’s zoom it back in a little bit. If, by the end of day today, we stay underneath this pink-shaded area, I believe we’re looking for the continuation of the downtrend, which could take this as deep as the 0.8500-level. We looked at this yesterday in the Trade Room.
So, 0.8500, 0.8540, I guess, is where the next support is. 0.8540 would be the blue-shaded area. So, this is critical. Staying under the pink zone, we go lower. If, by the end of day today, we get back above that pink zone and above the black trend line, we could be looking for a continuation or at least some more reversal back to the green zone. So, clearly we’re in a downtrend. Clearly it’s breaking underneath this pink-shaded area.
Let’s take it down to the 4-Hour Chart. There it is right there. If you’re doing anything, you’re staying and focusing your efforts. And if you’re already sold it based on our discussion in the Trade Room yesterday into the 0.8730s, 0.8740s and 0.8750s, then you’re just protecting profit now on sells underneath the pink-shaded area. I told you yesterday focus on the trend. Focus on selling rallies to resistance. The pink-shaded area is your resistance. Staying underneath there today, only selling for the AUDUSD.
The only reason to change that attitude would be a push back above 0.8755, above the pink zone, above the black trend line. We’ll look for some more targets. I know this 0.8540 is a long way away, so we’ll look for some more targets later on today. Forex Black Book is red. I don’t think we’ve seen enough upward movement or sideways movement to see a red signal, so no real opportunity with a red arrow here today for the Forex Black Book. But as long as you’re focused on the sell side, I think you’re going to be okay here for the AUDUSD today.
Next, moving over to the New Zealand Dollar versus the US Dollar [NZDUSD]. Pretty much the same thing here on the NZDUSD that we just talked about on the AUDUSD. We’re focused on the sell side. I changed things up a little bit yesterday during the Trade Room. I took the green-shaded area. Support that we had yesterday and split it into two shaded zones. The green now just being between 0.7780 and 0.7820, and the blue-shaded area now. The bottom of that zone, 0.7700 to 0.7725.
I split it up to give us a little bit more detail between the green and the blue-shaded area, down here at the very bottom. First off, point out over here on the left-hand side. That blue box. That’s historical support into the bottom of the blue box, the blue-shaded area. This is the Weekly Chart, so critical support here into the 0.7700-level for the NZDUSD.
Take that info down to the Daily Chart. We see the blue zone, the green zone, support, resistance right now. Let’s actually just go ahead and take it down to the 4-Hour Chart. We talked about the breakout yesterday in the Trade Room. What is the breakout? It’s the open and close underneath the green zone. It’s the open and close underneath the orange zone. It’s the open and close under the pink zone. This is the pattern of the trend. Circle. Circle. Circle. Next thing we’re looking for is the blue-shaded area to be our next support target.
So, what do you do? You sell the green zone. You target the blue zone. That’s really the main focus right now. What’s the risk? The risk is a breakout above the green zone. So, you’re selling the green zone, targeting the blue zone or lower, but initially targeting the blue zone, 0.7700. Your risk is above the green zone, 0.7820. If it breaks 0.7820, you probably don’t want to stay in a sell any longer because we’re looking for some pullback reversal back to the orange-shaded area, back up into the 0.7900-level. So, green zone is your risk. Blue zone is your target. Orange zone becomes the target if it breaks back above the green zone. I think just like the AUDUSD, the only thing you’re doing right now on the NZDUSD is selling under the green zone close as possible you could get.
You might already be in a sell from the 0.7780, 0.7790, maybe even 0.7800 as it made that spike over the past several hours, but selling underneath there really the main focus right now, until we see a change of this pattern where you see circle, fall, circle. Remember congestion, downtrend, congestion, downtrend. Congestion right now. We potentially look for the continuation of the downtrend. So, that’s the pattern of the trend. Follow that until the pattern changes, so that’s what we’d do. Sell green zone. Target the blue zone or lower. And a break above the green zone becomes your risk for the NZDUSD today.
