My EURUSD Trade Sentiments

Trading Discussion
51

I try and have tried to use a combination of fundamentals and technicals. Obviously I want to know what is going on that might cause a long term switch. But, I have no idea whatsoever is keeping the dollar as strong as it is right now. I would say while the stock markets make us look strong, the underlying economy could not be worse. Meaning for the people who have to eat and pay for utilities. But, as I have said, on a yearly basis I clearly beat any other traditional return on my money. Nothing more!

J.
BTW, are you in the states?

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52

I think technicals and fundamentals do not fully capture the innumerable factors; political, >geographic, financial, and sentiment changes which all drive the markets. It is a human impossibility to keep abreast of all the metrics responsible for the markets’ ever dynamic nature. The best we can do, as traders, is to speculate through making informed decisions from the data available to us.

I cannot hazard a guess for the dollar strength. My knowledge of fundamentals is average. It may have something to do with the elections in the US. That doesn’t explain why companies and traders are heavily investing in the US dollars and stocks. The most important thing is to leverage on the move and make some profit. As long as one can do that, such a person is golden.

I don’t reside in the States.

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So here is my analysis for today going into tomorrow. I would mark this with more areas where you believe you are going to find Support and Resistance and on several time frames. I will probably avoid this pair tonight because I am in a position on the GBP/USD long since last night. Good luck.

EUR/USD Technical and Fundamental Analysis

Technical Analysis: EUR/USD

1. Daily Chart:

• Trend: The EUR/USD pair is showing signs of consolidation within a broader upward trend, oscillating between key support and resistance levels.

• Key Levels: The recent low is approximately 1.0802, and the high is around 1.0869.

• Indicators:

• ATR (Average True Range): Indicates relatively low volatility, suggesting potential for a breakout.

• RSI (Relative Strength Index): Positioned around the neutral 50 mark, indicating a lack of strong directional momentum.

• MACD (Moving Average Convergence Divergence): The MACD line is near the signal line, showing market indecision.

2. 4-Hour Chart:

• Trend: A clearer short-term bearish trend is observed, with the price moving below key moving averages (50, 100, and 200 periods).

• Indicators:

• ATR: A slight increase in volatility, suggesting potential for more pronounced price movements.

• RSI: Below 50, indicating bearish momentum but not yet oversold.

• MACD: A bearish crossover has occurred, with a negative histogram indicating decreasing momentum.

3. 1-Hour Chart:

• Trend: The pair continues in a short-term downtrend, struggling to maintain levels above previous support.

• Indicators:

• ATR: Shows increasing volatility, which could indicate potential for sharp movements.

• RSI: Hovering around 30, indicating possible oversold conditions and potential for a short-term bounce.

• MACD: Shows decreasing bearish momentum, potentially signaling a near-term stabilization.

4. 15-Minute Chart:

• Trend: The pair appears to be consolidating after a decline, indicating indecision among traders.

• Indicators:

• ATR: Low volatility, typical of a consolidation phase.

• RSI: Close to 50, indicating neutrality.

• MACD: Flat near the signal line, suggesting a lack of strong directional momentum.

Fundamental Analysis: Upcoming Economic Events

  1. Eurozone and UK Manufacturing PMI:

• Eurozone: German and broader Eurozone PMIs are expected to show contraction, with the German PMI forecast at 43.5. This could exert downward pressure on the EUR if the data comes in weaker than expected .

• UK: The UK’s PMI is forecast at 50.9, indicating marginal expansion. Stronger-than-expected data could bolster the GBP .

  1. Eurozone Inflation Data:

• German Prelim CPI: The expected 0.1% increase is modest, and any significant deviation could influence market sentiment regarding ECB monetary policy .

  1. Speeches from Central Bank Officials:

• ECB President Lagarde and German Buba President Nagel: Their comments could provide insights into future monetary policy, influencing EUR sentiment, especially concerning inflation and economic outlook .

  1. U.S. Economic Data:

• ISM Manufacturing PMI: Expected at 48.5, indicating contraction. A significant deviation could impact the USD, with potential implications for broader market sentiment .

Strategic Considerations

• Trading Strategy:

• EUR/USD: Given the technical bearish indicators and potential for weak Eurozone data, consider short positions if the pair breaks below the 1.0802 support level. A break above current consolidation, accompanied by positive news, could signal a buying opportunity.

• GBP/USD: Strong UK PMI data could provide a bullish setup, particularly if it surpasses the resistance levels.

• Risk Management:

• Tight stop-loss orders are advisable, particularly given the expected volatility around key economic releases and speeches.

This comprehensive analysis combines technical and fundamental perspectives, providing a holistic view of potential trading strategies for EUR/USD amidst significant economic events. Traders should remain vigilant and responsive to market changes, particularly during high-impact news releases.

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54

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I couldn’t resist throwing a 15 minute chart up here as well. I have a Fibonacci retracement drawn from the last dominant move. You could potentially adjust this based on the hour as well. In my analysis, this did a retracement almost to the 61.8 which is significant on the 15 chart. If it’s to move lower, it’s probably from here. I would not consider consolidation broken unless you have some volume in the market when it does and sometimes, it’s better to let in come back and test the same area again. You may miss the trade but you are a lot less likely of getting into a false breakout. Just my thoughts. Trade well and make your own decisions based on your trading style!

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55

A comprehensive analysis indeed as usual. Tells me why you have been in the game for a very long time. I didn’t take the EU trade though I saw bearish sentiment for the AU I carried out an analysis on. I didn’t trade that either. I have been super busy along with other reasons for which trading was impossible. This is the reason I didn’t update the thread. Congrats, if you did take the trade.

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56

Last week, I said I would not buy because the bullish move did not give the breakout I was anticipating to convince me that buyers had stepped into the market. The reason is that the bears are still dominating market sentiment. Although I have not looked at the charts for EU, the path of least resistance is Southward given the move yesterday. Ultimately, like you rightly said, a person must make their own decision. Good pip hunting day to you.

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57

As I said last week, I can’t understand why the dollar is as strong as it is right now. Obviously the anticipation of a rate cut, which I believe you mentioned before might be part of it. I would have thought by now it would be baked in. I think most of the numbers I am seeing are weak for the USD and thus, I can’t get my head around it.

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58

It is funny the way fundamentals seem to defy logical explanation. There is, however, something I suspect behind the dollar strength that is not visible in the reports. There are market professionals or trading syndicates who use the opportunities provided by bad news to buy from those selling from panic. In VSA, this is known as Accumulation. They have been actively buying the dollar so that the weak numbers for the dollar seem to have no impact on its determined upward slope. That may also explain why the news and the price reaction from the news seem to conflict on occasions.

Apologies for the delayed reply. Just logged in.

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59

Living in the USA and understanding the economy as a professional and as a consumer, I can’t remember a worse economy than we have now! I think the only thing propping the dollar up right now is Europe is worse and Great Britain not much better. We need the US election to be over but who knows what may happen after that? Anyway, good trading tonight!

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60

That raises the question whether it is a coincidence that the dollar suddenly gained momentum in the period leading to the elections without justifiable economic recovery. The elections may also be a factor to take into consideration for the high demand of the dollar. In agreement, I guess we never can tell until the elections are over.

Congrats on a good trading day. On my part, I did not make any trades. Had other engagements. Good luck on another day of pip hunting.

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61

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We attempted to break out but it turned right back into the consolidation. It probably suckered a lot of traders and that’s why you wait. Getting ready for some serious news very soon so I am not trading and depending on what happens, I will probably be done for the day.

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62

I’ve enjoyed our discussions and contributions on the forum. I’ve noticed that the focus here sometimes leans more towards casual conversations rather than in-depth discussions on trading strategies. I’m curious about your perspective: do you think the forum members are more interested in socializing and sharing experiences, or do you see a community eager to delve into more serious and comprehensive trading strategies?

I’m keen on engaging in more detailed discussions if there’s interest, and I’d love to hear your thoughts on this.”

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63

I have not looked at the EU chart since the week began. I want to avoid trading as much as I can till I’m through with the project that currently occupies my time. This is why I haven’t made any update regarding my sentiments on the pair. I will make a point to always check for your posts so as to avoid delayed replies of which I’m twice guilty. My apologies…again.

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64

I started another thread but I have been concentrating on the GBP/USD. I just took a very good trade short. Check it out. I will keep posting here too, I just didn’t want to dominate your thread.

J

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65

Thank you. That makes the both of us. Your posts are especially enlightening as it makes me view the markets in a different angle. I learn even more than that.

I think forum members are inclined towards any discussion that is related to trading. Of course, there are topics that are not trading-related. There are tons of threads dealing with strategies as there are threads for discussion. I will participate in any if they make room for it.

I am always up for more detailed discussions. Threads like that help new members by giving them experience and the tools to build their trading systems.

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66

I am glad to hear it. I haven’t found too many friendly faces here yet. It seems trading Ma crosses and standing on your head when there is a full moon are trading strategies. I don’t want to be a snob but I would like people to take what I am putting out there seriously. I don’t know, maybe I shouldn’t worry about it.

Here is my thread:

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67

Wonderful. I will be contributing in your thread as I do here. Congrats on catching pips in your net. You are welcome to dominate the thread at will. Feel very free. At the heart of it, we are all sharing our knowledge with the community.

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68

Hahahaha. Am sorry but your reference to astrology got me in stitches. MA crossing is simple and objective. There are masters of the art. This is a popular launchbpad for new traders into the world of forex trading. The details, however, for the trade, if relying solely on the crossings, are missing so I get your point here.

Indeed, what anyone writes should weigh more than mere opinions. It should be considered serious by the readers as something that can complement their knowledge of trading.

69

I know there are a million ways to do it and I don’t want to be a snob, but maybe I am. I have never known in all my years anyone who simply used a Ma cross and was successful. Let’s say I never knew anyone who exclusively used that type of trade. If it were that easy, I would have retired years ago. I use crosses and crosses on the MACD but not without so many other factors. Anyway, to each their own.

J

70

I thought I would put my analysis up. No need for charts. I don’t trade right before or during Non-Farm Payroll.

Technical Analysis for EUR/USD (Without NFP Considerations)

Chart 1: EUR/USD 15-Minute Chart

  1. Trend Analysis:

• The price is oscillating around the moving averages, indicating a potential range-bound market.

• The 21 and 50-period moving averages are close to the price, suggesting a lack of clear direction in the short term.

  1. Indicators:

• ATR: Indicates low volatility, suggesting limited price movement.

• RSI: Around the midpoint, indicating no extreme conditions.

• MACD: The MACD line is close to the signal line, indicating a lack of momentum.

Chart 2: EUR/USD 4-Hour Chart

  1. Trend Analysis:

• The price has recently crossed below the 200-period moving average, indicating a potential bearish trend.

• The 21 and 50-period moving averages are also sloping downward, supporting the bearish sentiment.

  1. Indicators:

• ATR: Moderate volatility.

• RSI: Slightly below the midpoint, indicating a bearish bias but not in oversold territory.

• MACD: Bearish momentum with the MACD line below the signal line.

Chart 3: EUR/USD Daily Chart

  1. Trend Analysis:

• The price is below the 21, 50, and 200-period moving averages, indicating a bearish trend.

• The overall trend is bearish with lower highs and lower lows.

  1. Indicators:

• ATR: Indicates moderate volatility.

• RSI: Around the midpoint, not indicating extreme conditions.

• MACD: Bearish momentum as the MACD line is below the signal line.

Potential Trading Strategies

Scenario 1: Range-Bound Trading (15-Minute Chart)

  1. Identification:

• The price is oscillating around moving averages, indicating a range-bound market.

  1. Strategy:

• Trade within the range by buying at support and selling at resistance.

• Support: Around 1.0920

• Resistance: Around 1.0950

  1. Entry:

• Long: Enter at or near support (1.0920) with confirmation (e.g., bullish candlestick pattern).

• Short: Enter at or near resistance (1.0950) with confirmation (e.g., bearish candlestick pattern).

  1. Stop Loss:

• Place stop loss just below support for long positions and just above resistance for short positions.

  1. Take Profit:

• Target the opposite end of the range (1.0950 for longs, 1.0920 for shorts).

Scenario 2: Bearish Continuation (4-Hour Chart)

  1. Identification:

• The price has crossed below the 200-period moving average, indicating a potential bearish trend continuation.

  1. Strategy:

• Look for opportunities to short on pullbacks to resistance levels.

• Resistance: Around 1.0950

  1. Entry:

• Short: Enter on a pullback to the 1.0950 resistance level with confirmation (e.g., bearish candlestick pattern, MACD crossover).

  1. Stop Loss:

• Place stop loss above the recent high or the 200-period moving average.

  1. Take Profit:

• Target the next support level (e.g., 1.0880).

Scenario 3: Bearish Continuation (Daily Chart)

  1. Identification:

• The price is below the 21, 50, and 200-period moving averages, indicating a bearish trend.

  1. Strategy:

• Look for opportunities to short on pullbacks to resistance levels.

• Resistance: Around 1.1000

  1. Entry:

• Short: Enter on a pullback to the 1.1000 resistance level with confirmation (e.g., bearish candlestick pattern, MACD crossover).

  1. Stop Loss:

• Place stop loss above the recent high or the 50-period moving average.

  1. Take Profit:

• Target the next support level (e.g., 1.0880 or lower).

Final Notes

• Risk Management: Ensure each trade has a favorable risk-reward ratio (e.g., 2:1 or 3:1).

• Patience: Wait for confirmed signals and avoid impulsive trades.

• Review: Post-trade analysis to refine strategies for future trades.