Technical Analysis November 24th: The euro is up

24 November, 2017 - 07:53AM

EURUSD, Daily timeframe

Bias: Pair in Uptrend

We had a bullish day with the pair advancing about 30 pips up. The resistance at 1.1900 is near and it will be interesting to see how price reacts.

Scenario 1:

Price could respect the resistance level at 1.1900 and pull back. This would be a reason to think that the pair could be in a state of brief ranging motion. Immediate support is located at 1.1700 support area.

Scenario 2:

Price could push up and beyond that level of resistance and that would be in unison with the trend that we’re in, i.e. the bull trend. We need to see that price closes considerably above 1.1900 to have technical grounds for a potential long. Targets above are 1.2065 and 1.2100.

Scenario 3:

If price is negatively affected by news and falls below 1.1700 and closes the day below that support, this could mean that the retracement is back in place and actively pressing the euro down. Next level of support is located at 1.1500.

 

GBPUSD, Daily timeframe

Bias: Pair in Uptrend

Thursday was uneventful for the British pound. We saw a small decrease in price of about 30 pips and the pair was lingering at the 1.3300 resistance level in the late afternoon. So far price is moving in alignment with the established uptrend. What’s next?

Scenario 1:

It is absolutely obligatory that we see a significant push above the 1.3300 resistance level. 80 to 100 pips could be enough for us to see that movement (on the daily timeframe) as a trigger for a long trade. In this scenario, if you’re already in a trade, this could be a signal to add onto your existing position. Of course, all should be done within the parameters of your risk management criteria you’ve set beforehand. Target above is 1.3654 (also a level of potential resistance).

Scenario 2:

If we see price dropping from 1.3300 and closing the day considerably below, this would mean we’re back in the range. Next level is the lower band of the range at 1.3050. Mind you that price could zig zag or make multiple retests of the upper resistance prior to testing the support.

Scenario 3:

Closure of price on the daily (or weekly timeframe) below the support at 1.3050, would suggest that the sentiment is short-term negative. No long trades in this scenario. All we have to do is pre-plan our trades in direction of the trend and trade the movement once it’s the right time.

 

AUDUSD, Daily Timeframe

Bias: neutral

There was little change for the day in the Aussie pair. Price gained about 14 pips and is currently in the middle between levels. We’re monitoring the following scenarios:

Scenario 1:

Price starts to recover and pushes up toward the resistance level at 0.7750. This level could stall price for a while. It is both a target level (since price has already been there once and respected that area) and a level of resistance.

Scenario 2:

A retest of the immediate support at 0.7505 is also a possible option. It could even be in the form of a tail from a daily candle testing and then pushing up. Or another possible formation is a bearish candle touching the support level and then the day after covering the body of that candle and pushing back up.

Scenario 3:

If price close way below the support at 0.7505, this could mean more bearish sentiment for the pair. Next level of support is at 0.7300. No long positions in this scenario.

 

Gold

Bias: Uptrend

The precious metal was down about 45 pips but by the end of the day price advanced up toward opening price for the day. The movement is not a game changer, so we continue with the approach of monitoring specific levels where price has significance and where it can be traded.

We need to see price closing above 1295.00 for a bullish confirmation.

Scenario 1:

The reason why we want to see price closing above that level is because we should always have a criteria fulfilled before entering a trade. The direction should be clear and price action consistent. If met, then price action could aim toward 1350.00 as a target level. Dollar performance against the basket of major pairs should also give us a clue as to the direction of the commodity.

Scenario 2:

Price could make yet another retest of the support at 1260.70. This could also become a potential entry point for a long position. Just make sure that price has pushed against it with a bullish daily candle.

Scenario 3:

A closure below 1260.70, could mean more weakness for gold. No long trades to be opened since we’re trading only in direction of the trend and not against it.

 

Wishing you happy and successful trading!
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