It's been a while since EURUSD got updated hasn't it? For good reason I've avoided pretty much all trades on EURUSD as the price action has been very sloppy and undecided. We've had a multitude of false breaks on the structure we had identified, but no confirmations. In all of the last several weeks of trading though, one thing remained untouched, and that was the weekly strength .
EURUSD has been trading just below it, and now as we are just a few hours away from Thursday's daily close we are withing 50 pips of it. As long as a structure has been proven it will be defended first, so look for signs between 1.0950 and 1.10000 for a move lower.
If we manage to get a daily close above 1.1000 it could open up the door to long trades.
I remain overall on this pair, we should have our answer very soon relatively speaking. Pay attention to the structure.
Feel free to comment/like/follow
Everyone is familiar with decimal or base 10 numbers where 10 = 10 and 255 = 255. However if I use hexadecimal or base 16, 10 is still 10 but 255 is now FF. They are the 'same' but they are presented differently.
So for me, let's bring this back to Forex, the EMA 20, 50 and 100 are taking the historical prices over the last 20, 50 and 100 time periods and averaging them. The current bid/ask price of an instrument moving above historical price can be correlated with it continuing to drive higher however it should not be viewed as causation. You will find the correlation between moving averages and the mentality you're talking about significantly stronger while the market is trending, but significantly weaker when the market is ranging. I've outlined that weakness in this picture here:
There are a lot of useful tools out there for traders, but it's important that we always go back to the foundation of what the market is. It's what people are willing to buy or 'sell' at. If everyone and every entity bought the EURUSD when the EMA 20, 50, and 100 were all in sync...well 2 things would be for certain, 1. Trading would be easy just buy EURUSD, and 2. EURUSD would never have a downtrend, because the price cannot fall below the EMAs because people are buying it because price is above. Everything has gone full circle, correlation is not causation.
I hope that makes sense.
My indicators are basically nonexistent because I am letting the market define itself. My trading strategy boils down to using basic price action, structure and support/resistance. Trend lines, basic patterns, and candlesticks play an important role in the decision process.