Price Action Forex Euro Dollar X ray

Posted by on Mar 17, 2013

By David Ruscelli


This post in italian

Price Action Technical Analysis and Economic Calendar

In the next few hours we will provide an article dedicated to market movers written by Valentino Zannoni, therefore I will limit myself to discussing the economic calendar, please note that next week the dates highlighted in red will be different, specifically we are awaiting the FOMC in the USA on Wednesday and Thursday the IFO index in Germany. The IFO index, for people who don’t know, expresses the view of the German business world, a real survey amongst approximately 7000 entrepreneurs who are answering questions and sharing their opinion regarding the current state of German economy and their expectations for the next 6 months, this survey is conducted every 30 days.  

 economic calendar

 

PRICE ACTION FOREX

 

Let us immediately go over the price action, today I would like to analyze the Euro Dollar more in detail, I am going to unravel the presentation of only one of a thousand possible scenarios, the interesting feature that emerges is that trading can be done in both the purchasing and selling of euro dollar, depending on the price action signals that would form in the event area, by that I mean the supports and /or resistances converging also with trend lines. 

 

EUR/USD

To examine the situation we will start by utilizing a linear chart (which is cleaner when compared with candlestick chart) and let’s aid ourselves by tracing the key level of support and resistance and trend lines, keeping  in mind the full concept of price action forex we will also remove from the chart all mobile averages

The hypothesis is based on the fact that we have a special value, the weekly trend line which unites the decreasing maximums of August 2008, march/October 2011 and a future scenario around April May 2013, where as a continuation to this trend line we will see again new decreasing maximums.  

What does this mean?

It means that Euro dollar could climb a little more, but in short bursts and not very strongly, so it will be possible to do some buying trades but also going short, the situation could be ranging for several more weeks, until we will join the weekly trend line that unites the decreasing maximums starting in 2008 (5 years). I do not expect to see the euro into the abyss in the near future, rather in lateral position and very congested. The two options that I have “imagined” are the two lines traced with a pencil, one a light blue and the other a darker blue. The light blue one hypothesize a weaker climb until reaching even 1,3400. The darker blue a descent starting tomorrow, but then subsequently countered for a short rally up to 1.3000 1.3100.

Do take this outlook with a grain of salt, the possible avenues are so many and I do not have a crystal ball, for instance it could even go down to 1,20 before climbing again to reach the trend line. The most important aspect, I repeat, is that from my point of view the current situation justifies both purchasing and selling trades with a certain flexibility, hence we will adjust our trades accordingly in the coming week.

EUR/USD W1 linear

euro dollar price action weekly line

In the following chart I have highlighted with more clarity the possible areas of an event of resistance where we may see a recovery in price in favor to the primary trend (bearish).  

EUR/USD W1 candlestick

euro dollar w1 candlestick

EUR/USD D1 

euro dollar d1

 

USD/JPY

The crazy rally over the past few weeks is now adjusting a little its path, there is a correction going on that could allow us to grab a trading opportunity price action forex by buying on the highlighted support at 94,50.

USD/JPY D1

dollar yen forex

 

GBP/USD

The forex chart for the cable, that is the English pound sterling quoted in U.S. dollars, during the weekend there has been a beautiful buying opportunity, over a very strong support that we have repeatedly highlighted in this very blog.  

GBP/USD CABLE H4

 cable chart h4

 

There is a second pin bar over there at the top, but it is not ideal for a new buying entry, particularly if we take a look at the Daily chart, we will see that there is no confluence, the daily chart is completely bearish and the rally occurred following the pin candle on the 12th is a gift we are better off gratefully accepting without pushing any further.

 GBP/USD D1

cable forex daily

 

Thank you for your time, I suggest that you keep checking the blog because in a few hours we will publish a preview of the article about market movers by Valentino Zannoni.

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