EUR/USD - Is It Time To Buy!?
Back in September, I published an article in which I explained the turn-around that was the come in the dollar. Unfortunately, however, that post was hidden by the moderators. Now that my idea is starting to come into fruition, I'd like to go expand on it even further except in reverse by analyzing the EUR/USD pair.
As you can see from the charts, I've kept my analysis pretty simple. Let's outline some key points.
- The most noticeable action on the chart, in my opinion, is how price rose to the second supply level (drawn on a smaller time frame) and completely reversed.
- After reversing from a level of supply, prices ran smack into a demand level. However, that demand level had already been tested, so there really wasn't much demand to be found.
- Even though there wasn't much demand to be found at that level, prices also ran into an underlying level of support and there was a little bit of buying there.
Conclusion: I'm a bull at this level but short-term since I'm not convinced that we're going to see a full resumption of the bull-trend in the EURUSD. If you take a look at the dollar index, you'd see that we may be at the start of a bull-market in the dollar (as I called in September) and, at the moment, most of the USD pairs are setting up for a pullback. If anything, I'd ride a long position until reaching a level of resistance. If it plays out that way, then I have a pretty good idea where that level of supply may be. :-)
Addendum: I usually don't consider fundamental analysis when I'm trading but you have to also take note of the rise in interest rate yields in the U.S. Treasury market (which I've been anticipating for months), which is bullish for the dollar. Combine that with the Jerome Powell's comments outlining his intentions to scale back the Fed's stimulus — again, bullish for the dollar.
As you can see from the charts, I've kept my analysis pretty simple. Let's outline some key points.
- The most noticeable action on the chart, in my opinion, is how price rose to the second supply level (drawn on a smaller time frame) and completely reversed.
- After reversing from a level of supply, prices ran smack into a demand level. However, that demand level had already been tested, so there really wasn't much demand to be found.
- Even though there wasn't much demand to be found at that level, prices also ran into an underlying level of support and there was a little bit of buying there.
Conclusion: I'm a bull at this level but short-term since I'm not convinced that we're going to see a full resumption of the bull-trend in the EURUSD. If you take a look at the dollar index, you'd see that we may be at the start of a bull-market in the dollar (as I called in September) and, at the moment, most of the USD pairs are setting up for a pullback. If anything, I'd ride a long position until reaching a level of resistance. If it plays out that way, then I have a pretty good idea where that level of supply may be. :-)
Addendum: I usually don't consider fundamental analysis when I'm trading but you have to also take note of the rise in interest rate yields in the U.S. Treasury market (which I've been anticipating for months), which is bullish for the dollar. Combine that with the Jerome Powell's comments outlining his intentions to scale back the Fed's stimulus — again, bullish for the dollar.
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