I hope you all are having a great weekend. I am toying with the idea of posting a weekly analysis of the FOREX markets that I watch every Saturday showing important levels, what I am watching for, and my market forecasts. I hope this sparks a lot of discussion in the comments because anyone with more than 14 days market experience knows that there is an infinite number of ways to trade the markets, and by having in-depth discussions we can all learn from each other - so ask questions and link in your own analysis!
What Has Happened
The EUR/USD has been in a bull run for quite some time. Since December 2016 the market has put in a series of higher lows (indicated by the blue lines). There has been periods of market consolidation but generally speaking the lows get higher and the highs follow along. Since January the lows have been moving sideways which is telling me that prices are consolidating. At this point, there isn't enough evidence to indicate if the consolidation will result in a reversal in trend or not, but the consolidation does bring breakout strategies into play. I am currently playing this range by buying at the low of the range and selling at the high of the range. The market closed at the median of the range, so if you are not involved then don't get involved. The median of the range is an area where anything can happen so I personally would not enter a position here without a strongly back tested strategy.
My Prediction
I am predicting 1.2550 to hold as resistance. This level has held since 2014 and I don't see any strong evidence of it breaking. However, strong opinions weakly held is important here. If this level does break I will be testing my breakout strategy in demo (because it's not yet ready for live capital). If 1.2550 fails, my next best guess for finding resistance would be at 1.2640 at that seems to be the next level up from 1.2550. However, that was such a long time ago that I am not sure the traders in today's market have the same mindset as the traders back in the 2014 bear market.
My Trade Plan
I am currently long looking to take profits at 1.2550. If we see a bounce from that level, then I will be looking to short and cover half the position at the median and the other half at 1.2155. If price breaks and closes above 1.2550, then I will be demo trading the breakout because my breakout trade strategy is untested currently. If 1.2550 holds and 1.2155 fails, then shorts running to 1.1900 is a possibility.
What do you all think?
What Has Happened
The EUR/USD has been in a bull run for quite some time. Since December 2016 the market has put in a series of higher lows (indicated by the blue lines). There has been periods of market consolidation but generally speaking the lows get higher and the highs follow along. Since January the lows have been moving sideways which is telling me that prices are consolidating. At this point, there isn't enough evidence to indicate if the consolidation will result in a reversal in trend or not, but the consolidation does bring breakout strategies into play. I am currently playing this range by buying at the low of the range and selling at the high of the range. The market closed at the median of the range, so if you are not involved then don't get involved. The median of the range is an area where anything can happen so I personally would not enter a position here without a strongly back tested strategy.
My Prediction
I am predicting 1.2550 to hold as resistance. This level has held since 2014 and I don't see any strong evidence of it breaking. However, strong opinions weakly held is important here. If this level does break I will be testing my breakout strategy in demo (because it's not yet ready for live capital). If 1.2550 fails, my next best guess for finding resistance would be at 1.2640 at that seems to be the next level up from 1.2550. However, that was such a long time ago that I am not sure the traders in today's market have the same mindset as the traders back in the 2014 bear market.
My Trade Plan
I am currently long looking to take profits at 1.2550. If we see a bounce from that level, then I will be looking to short and cover half the position at the median and the other half at 1.2155. If price breaks and closes above 1.2550, then I will be demo trading the breakout because my breakout trade strategy is untested currently. If 1.2550 holds and 1.2155 fails, then shorts running to 1.1900 is a possibility.
What do you all think?