Free Profitable Forex Newsletter
Hey! This is Philip with this week's trade idea of the Free Profitable Forex Newsletter!
On Monday, I discussed the situatio n on EURUSD in our weekly analysis ( find it here), and explained how the 1.1750 - 1.1800 area would be a good place to sell if EURUSD reached it. And that is exactly what is happening now. However, I don’t suggest rushing to sell here, but rather, let’s wait for further confirmation of a reversal in this 1.1750 - 1.1800 area.
That’s because the larger trend here is still up here. That’s why we instead suggest waiting for a convincing sell signal in this 1.1750 - 1.18 area, which should increase the probabilities that another bearish leg will follow.. That will provide a higher-probability trade.
EURUSD Correction to 1.15 Remains On
The rationale is as discussed recently in the weekly analysis. EURUSD started the downside correction two weeks ago with the break below 1.1750, and should now extend lower toward the 1.15 area. That may as well happen this month on USD positioning adjustments just as we go into the US election on November 3. Especially when we consider the extreme USD short exposure, some scaling back on those positions is likely ahead of the big event. This
should help the dollar to gain some more ground before a big reassessment of investors’ views takes place after the US election.
It’s also possible that the market may enter consolidation without much direction for the next 4 weeks into the election. Such a range in EURUSD would likely have 1.15 as the bottom and 1.18 as the top. Therefore, the current levels around 1.1750 are still attractive for shorting the pair from this perspective as well.
The big event this week is obviously NonFarm Payrolls. However, no big surprises are likely there. If the actual jobs numbers come in line with or close to consensus expectations, then the USD is likely to firm after the event passes and likely into the next week. If the jobs numbers beat the expectations, possibly by a large margin, then the USD would likely surge more strongly. Overall, the probabilities favor a stronger USD on this NFP report. That may
as well happen gradually over the next week.
Perhaps waiting for 1.18 to be thoroughly tested before selling would be a good strategy. A strong rejection in this 1.1750 - 1.18 area will confirm our thesis here and increase the chances for a reversal back lower.
Entry:
- Look to enter short around the 1.1750 - 1.18 area
- Wait for a high-conviction sell pattern or signal to occur on intraday timeframes
- A strong rejection of a fast bullish attempt or similar strong reversal would provide a more convincing signal
Stop loss:
- Above the entry pattern or sell signal
- That is likely to be above the 1.1750 - 1.18 area
Target:
Trade signals from the past week
- September 25 – Long AUDUSD from 0.7055, 1st target reached at 0.7140 = +85 pips profit (the 2nd target at 0.7180 was also reached later)
TOTAL: +85 pips profit in the past week
TOTAL: +3055 pips profit since October 1, 2018
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Thank you!
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