Free Profitable Forex Newsletter
Hey! This is Philip with this week's Fx update of the Free Profitable Forex Newsletter!
Last week we suggested a potential short EURUSD trade in the 1.1750 - 1.18 resistance area, but so far, the price action has been largely uninspiring. EURUSD has entered a consolidative mode and trades without a directional bias, like most other Fx pairs too. The trade wasn’t triggered, though it could still be a good opportunity as the probabilities favor a lower EURUSD from here. Only, that may not happen in the most straightforward way.
The reasons for the market entering a wide consolidation mode are not hard to find:
- The US presidential election is less than 4 weeks away;
- the Brexit saga is approaching the final stages before either a deal is struck or we head for a disastrous no-deal Brexit;
- the markets are in anticipation of further stimulus from central banks and governments with high uncertainty about how large and what type of stimulus we’ll get in the US and Europe.
Given all these uncertainties, it’s not surprising that traders may choose to stay away from the market and wait for the outcomes of the big risk events before they take new positions.
In the meantime, the coronavirus pandemic continues to wreak havoc on the global economy with record numbers of new infections in many countries. This second wave appears to be less fatal than the March/April one, though, which is one positive in the whole situation.
Scope for EURJPY to decline, though careful trading ahead of US election
Considering all of the above, it may be best to stay sidelined for the time being, aside from short-term tactical trades. Hence, we are not recommending a specific trade with entry, stop, and target levels this week.
There is potential for a downside move in EURJPY, however, for those who are willing to take the chance. Looking at the technicals alone, the setup looks very nice on the charts. Both EURUSD and USDJPY are at resistance near 1.18 and 106.00, respectively. EURJPY is also at resistance on its own charts around the 1.2450 - 1.25 area. This is the neckline resistance of the head and shoulders
patterns that was activated on September 16.
Based on this, there is scope for EURJPY to complete a successful retest of the broken support and reverse lower again. It can revisit the September lows around 122.50 in such a scenario and even fall further if the bearish move gathers force.
However, to say again, given the current environment in markets with the US election ahead of us, the price action may not behave in the usual manner. So there is a risk of fake breakouts and patters which may fail.
Trade signals from the past week
- Short EURUSD around 1.1750 - 1.18 resistance area - not trigger yet as pair enters range (trade idea sent on October 1)
TOTAL: N/A in the past week
TOTAL: +3055 pips profit since October 1, 2018
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Thank you!
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Any opinions, news, research, predictions, analyses, prices or other information contained in this newsletter is provided as general market commentary and does not constitute investment advice. FX Trading Revolution will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
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