By FX Insights Moderator,Well, not a whole lot of excitement in the market today, but we do have some issues to cover, starting with some Eurozone fundamentals...
This morning's economic data out of France and Italy's industrial sectors was weak, as we forecasted which certainly kept some downside pressure on the euro today...
We can identify three variables that kept the euro above the 4500 level -- commodities, equities, and the 10-year yield...
Both oil and gold were well supported today, especially oil, which is very euro supportive. The Dow and S&P/500 managed to stay in the green and close in the green, in addition, the 10-year yield cooled off from its recent highs... so, we had all of those factors which kept the EUR/USD above the 4500 level and helped today's signal to pay out, as it always does...
Fundamentally we get ZEW data tomorrow morning, which I firmly believe should disappoint to the downside and keep continued pressure on the euro... my research is not showing a high level of investor confidence in the Eurozone under present market conditions...
In addition to those market correlated variables giving us decent trade direction, it seems some of the old familiar EUR/USD price actions are finally starting to return to the market with more frequency and more reliability...
I'd like to give you a really good example of how we used price action and tracking the EUR/USD 30-minute opening prices to take a short at the top of today's range and rode it down for an easy 70 pips...
At 2:54 a.m. EST this morning we took a EUR/USD short at the price of 1.4570. The best indicator we used to determine to take the short was price action and using the 30-minute EUR/USD price openings... in addition, the time of the day what another key factor in determining to take this trade...
Lets look at the 30-minute price openings that led us to the point of taking this short:
(All times listed are EST)
11:00 p.m. -- 4527
11:30 p.m. -- 4543
12:00 a.m. -- 4538
12:30 a.m. -- 4550
1:00 a.m -- 4556
1:30 a.m. -- 4542
2:00 a.m. -- 4557
2:30 a.m. -- 4548
Now, if you were to briefly glance at that price opening pattern it wouldn't look like much, but allow me to explain how we used it to take the trade...
In addition to using the 30-minute price openings we were watching the real-time price action and observed the EUR/USD struggling to stay above the 4550 level, which was a key level...
Between 11:00 p.m. and 2:30 a.m. it didn't make an exactly perfect string of 7 higher openings, however, it never opened lower than the 11:00 p.m. price of 1.4527 but it couldn't open higher than 1.4557, so that right there was a great indicator it was likely to open lower the next several timeframes...
The other indicator was time of day... the EUR/USD was making those price action patterns and we were getting close to the European opening at the same time it was struggling to move higher, so we basically put all the pieces of the puzzle together, knowing with a fair degree of confidence that the euro would likely come down during the early European session...
Time of day indicated the euro needed to be shorted... price action indicated it needed to be shorted... it's failure to sustain a break of the 4550 level was an indicator... forecasted weak fundamental data was yet another indicator...
So really, it was a no-brainer trade... we decided to close this short at 10:44 a.m. EST at the price of 1.4499 after the euro displayed price action patterns of likely finding a bottom for the day somewhere between 4502 and 4478.
A short time after this short was closed our system triggered a signal, then we bought the euro back and closed our euro longs at 1.4525 this afternoon, again, based on the price action patterns...
Hopefully the example above sheds some more light on using price action and will help you in your quest to use it as a trade indicator...
EUR/USD Trading:
I'm still cautiously biased towards the downside for the euro until the market shows me otherwise... as we mentioned the euro has been unable to sustain a break of the key 4550 level which I believe keeps the doors open to more downside testing...
I think there's a fair probability to see downside testing in tomorrow's trading... the market appears to be setting up that way... we'll certainly be watching closely as we approach the 3:00 a.m. EST timeframe...
This morning we had another great live audio Q and A session in the chat room, so thank you for the questions and the participation.
There's a very important post about our SMS system and some solutions to make sure you receive the buy signal alerts on your email... please click here to read this important message.
That's all for now... see ya in the chat!
-FX Insights
No comments:
Post a Comment