EURUSD Analysis

Welcome back Forex traders! Hope you had an awesome weekend.

The movements on Thursday and Friday during the bid rate and NFP were again massive and wild…

The roller coaster ride was impressive as always… but that is one of the reasons why I am always very careful on these types of days.

I hope you kept a keen eye on risk management in these times of volatility….. Rule 1 is always to preserve your trading capital.

Looking at the power and momentum the EURUSD has shown to the upside last week, I am expecting more EURUSD upside and remain a EURUSD bull.

Just like I was Bullish on the EURUSD a week ago and 2 weeks ago, despite the bearish clouds that seemed to threaten the EURUSD…. The upside turn indeed materialize. Please read the article of a week ago here, and 2 weeks here via this link.

Let us continue with the EURUSD analysis and start with the week chart.

UPTREND

The week chart is showing a nice and neat uptrend with each weekly candle having higher highs and higher lows.

06 10 EURUSD WEEK 2

And for those of you who have read the “million strategy”, you know what this means! Take a look at the article for information on this great strategy.

But for those of you who followed those guide lines, you just made an awesome winning trade on a EURUSD that just blasted to the target. Great job on catching those pips!! Did take that trade setup? Please write down below yes or no, and if you did how many pips you got on that trade! Thanks!!

06 10 EURUSD DAY 2

Anyhow, also when looking at key tops and bottoms on the EURUSD chart, we are able to detect a higher high…  The EURUSD broke the key top at 1.3240 and has now posted both a higher low and a higher high, thus of course giving more confirmation of the uptrend…

Besides the obvious characteristics mentioned here above, the weekly candle is also quite impulsive in its character and has a decent size of 360 pips. Yes there is a bit of a wick on top, but I do not consider that to be much of a danger for the bulls at the moment.

Besides higher highs and higher lows and the impulsive character of the daily and weekly candles…. I also noticed something interesting on the ADX.

The ADX indicator is a great measurement for trends. Please read more about if you need more information on how to interpret this indicator. In most cases I trade naked without hardly indictors but occasionally looking at the ADX does some extra value.

In this we can see that the daily ADX has bottomed out below the 25 level and is in steady rise up, thus signaling the beginning of a trend. Considering the current directional power of price which is up, the trend continuation in this case would mean up.

Once the trend reaches a value of 50 or 60 on the ADX, then we should become cautious again as the likelihood of upside trend continuation is diminishing.

Also interesting is that the weekly ADX is turning and quite low. This too seems well setup for a major move with plenty of space to steam ahead.

The upside looks good to go!

06 10 EURUSD WEEK

TARGETS

The target for the upside is the 0.272 of the first move up. That target is at 1.4160. It is also equal to the 786 Fibonacci retracement level at +/-1.42, which makes the 1.4150-1.42 area a great confluence. Around that price level, there is of course also the well known top of the weekly wedge trend line.

06 10 EURUSD DAY

RESISTANCE

Of course before the currency reaches those targets it will encounter serious and major resistance along the way. Resistance that might even turn this currency bearish…

But for now I remain bullish.

The resistance levels are:

1)      Current Thursday high at 1.33

2)      618 Fibo of the move down (1.37 – 1.2750) at 1.3340

3)      786 Fibo of the move down at 1.35

4)      886 Fibo of the move down at 1.36

5)      Major top at 1.3710

06 10 EURUSD DAY 3

4 HOUR CHART

When we look at the shorter time frame and zoom in the 4 hour world, we can see that retracement to the downside encounter strong support levels.

1)      The 382 Fibonacci retracement Fib at 1.3130

2)      The sideways zone at 1.3040 – 1.3110

3)      The 500 Fibonacci retracement Fib at 1.3080

Although the screenshot does not show it, the targets are as follows:

a)      -0.272 target at 1.3425

b)      -0.618 target at 1.3580

Any move back down these price levels should find massive support.

The currency might even bounce off the current 236 Fib at around 1.32. If that were to happen, then I will look for taking longs when breaking the top at 1.3307. I will go long upon a smaller retracement on the 1 hour chart and wait for a bull flag break.

06 10 EURUSD  HR

IMPORTANT

For those of you have read my article on Friday, you know that my passion is to make everyone the best Forex trader they can be. The live trading room is one of the best methods of teaching so I hope you have joined our trading room in the mean time. Please read here why a Forex trading room is so important and click here how to join http://www.winnersedgetrading.com/trading-room-page/

Of course articles such as this EURUSD analysis is definitely also very important. However, one of the problems I bump into as a Forex educator is that I can’t check with you if the material is actually making sense to you.

So I thought, why don’t I ask you a multiple choice question. The only thing you need to do is write down below the letter which you think is the correct answer. Simple right? Yes it is, so please do so before leaving this website!

POP QUESTION:

Does the Fib target depend on which Fibonacci retracement price actually uses to bounce to the upside?

A.)   Yes, it does. Any Fib up to and including the 618 has an ultimate target of -0.618, with an expected bounce at -0.272

B.)    Yes, it does. Any Fib up to and including the 382 has an ultimate target of -0.618, with an expected bounce at -0.272

C.)    No, it does not. The main Fib target for all Fib retracements is the -0.272.

D.)   No, it does not. The main Fib target for all Fib retracements is the -0.618.

Write down your answer here below! I am looking forward to your feedback!!

As always, I hope that you have enjoyed this EURUSD analysis…

Thank you for sharing! Wish you great trading!

https://twitter.com/@winnersedgetrad

Chris Svorcik

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  • Chris Svorcik

    That is awesome! Great trading and good job.

    Thanks for the post and please don’t hesitate to drop a note in the future or ask any questions you like.

  • taxfreelt

    thanks I got 150 pips on EUR move