Welcome trading legends,
In this post, we’ll be trading the EUR/USD asset using the signals provided by the Tools Trades website and the IQ Option broker. Be sure to stick to the end of the video as I’ll be sharing a special promo code with you.
Allow me to explain why I’m trading this particular asset.
It is now almost three months since the European Central Bank’s Chief Economist Philip Lane, and other unnamed ECB officials, effectively drew a line in the sand at 1.20 for EUR/USD, signaling that the central bank does not want to see the pair above that level for fear it would damage the Eurozone’s economic recovery.
Since then, EUR/USD has fallen as far as 1.16 but for most of this month, it has been edging higher as news of coronavirus vaccines and central bank stimulus have raised hopes of an economic recovery next year. That in turn has prompted investors to shift out of the safe-haven USD and into more risky assets including EUR.
EUR/USD has not yet been overbought and there is no evidence that the ECB could stop the pair from appreciating further even if it wished to. After all, it is almost impossible to imagine even more monetary stimulus than is already here or on the way. That argues for a sustained breach of 1.20.
However, no trend lasts forever and the fairly steep climb from just under 1.16 at the start of this month points to at least a pause and perhaps a pullback. Overall, therefore, a period of consolidation is now arguably the most likely scenario for the next week or two.
Intraday bias in EUR/USD stays mildly on the upside for further rally. The decisive break of 1.2011 high will resume the whole rally from 1.0635 low. On the downside, though, the break of 1.1800 support will turn bias to the downside, to extend the consolidation pattern from 1.2011 with another falling leg.In the bigger picture, a rise from 1.0635 is seen as the third leg of the pattern from 1.0339 (2017 low). Further rally could be seen to cluster resistance at 1.2555 next, (38.2% retracement of 1.6039 to 1.0339 at 1.2516). This will remain the favored case as long as 1.1422 resistance turned support holds.
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