In the Forex Market, the EURUSD currency pair performed well last week. 100% execution of the expected movements brought more than 100 points of floating profit. And at the end of the trading week, on Friday, the us dollar began to lose previously achieved boundaries on the background of profit-taking by some traders.
The Forex Master strategy is not a “scalper ' strategy. And Friday's growth, which clearly dissolves the accumulated floating profit, is not a reason to close the position. Entering the Market is always difficult and difficult. Almost always after the entry, some drawdown on equity is formed. If Friday's growth stops at the upper limit of the 4-hour southern channel and the price turns on Monday at the auction, it will look like another classic version of working out the technical level. The market does not always show predicted movements. But very often this happens. Therefore, the drawn 4-hour channel should not be taken seriously. This is just a 'help'. In this situation, there is a risk of the pair moving North. After the fall, growth occurs. But where are the reasons for growth? Neither Europe nor the United States has them. But in this case, the EURUSD pair is on the swing (or scales). And if anyone is getting stronger in the current conditions, it is the dollar.
The crisis has not gone away. Fears for the global economy are mostly negative. It is felt that the EURUSD pair is moving down not because of the strength of the dollar, but because of the weakness of the Euro. The fundamental background for the Euro currency is very contradictory and unstable. European politicians have demonstrated their inability to agree on anything. And in the US, decisions are made much faster. As part of the post-crisis recovery, the United States will also be ahead of Europe. The pair calmed down in their bursts and after all the panicked movements up and down again found themselves at the same levels where they were before the beginning of the coronacrisis. Buyers can try to drive the price higher, but sellers will become more active at the upper borders of the descending channels. Selling on growth is still the best tactic. The EURUSD pair has entered its long drawn-out trip to the South. Bulls try to buy at a low price. But why do they think it's time to buy? What if the trend continues?
After such images, and even supported by the appropriate fundamental, you can draw target lines. Zones marked by three depressions, where the first green border will be passed in the direction of parity. After reaching it, the pair will continue to move to the levels of 2000-2002, the second green line at 0.8618.
Now the pair is moving South due to the overall negative background. And then it will move South, because America will recover faster, and emerging macro statistics will cause interest rates to rise, which in turn will continue to play in favor of the dollar. At the same time, a crisis of integrity and unity will break out in the European region. This will put pressure on the Euro in the long term.
The Forex Master strategy includes an offensive campaign to the South on the EURUSD currency pair. If the pair continues to move down next week, it will be possible to state the continuation of the trend and the price separation from the entry level. Having a constant floating profit on equity is always useful for the account. the So-called proto-traded profit zone will help smooth out the inputs for other transactions, and in case they go into the negative, it will compensate them. Positions can be held open for a very long time. The swap is not credited. You can let your profits grow. And while this is happening, nothing prevents you from looking at another currency instrument.
You can add a few touches to the long-term technical picture. The price is located near the lower border of the multi-year triangle and it looks like it intends to break through from the top down. Then there are three depressions from 15-16 years in the immediate vicinity. Then the level of parity becomes attractive. There is ample indirect evidence of the intention of the Market.
Using the three-screen system, it is very convenient to observe the development of events. Intraday timeframes are not confusing, and senior TF objectively show the situation. The long-term fundamental is not in favor of the European currency. Still, the growth of the pair should be considered as an opportunity to enter the sale. The higher the pair rises, the more profitable levels the Market will give us.
The last video summit of the EU countries did not bring any agreements on sensitive issues, in particular the so-called grants and concessional lending. The panelists left the Market confused. We can only observe the harmful consequences of such failed attempts to find a solution for all members of the European Alliance.
There were proposals to use strong incentive instruments in the form of 1 trillion euros. They could be distributed within the budget for the next 7 years. But misunderstandings about where to Finance this rescue operation still prevail.
The German Chancellor said that her country's contribution to the General Fund can be increased, but does not support the idea of preferential loans and grants. On the contrary, the head of the European Commission, von der Leyen, suggests combining funding.
At the beginning of May (06.05.20), another EU summit is expected, which will obviously take place in a tense atmosphere. The Northern countries of the Alliance do not agree with the southern Europeans on the source of funding. Also, the delay in the implementation of such a program of assistance until 01.06.20. and the desire to shrug off the decision-making process, placing this burden on the European Commission. This is very negative news for Europe and for the fate of the Euro currency. After all, the meeting did not come to any decisions that are fundamental to the existence of the European Alliance itself.
Before Friday's profit-taking, when EURUSD started to pull back up, Forex continued to sell the pair on the sly in response to this news. Similarly, Italian government debt spreads tend to expand. The Italian government has very little choice. The pandemic crisis continues to have an impact, and Italians have not yet developed clear plans to leave the European Union, or establish a new Italian currency. In the medium term, the Italian government can find money through fiscal tightening and measures by the European Central Bank as part of the purchase of PEPP. In any case, clouds are gathering again over the southern EU countries.
Unlike the United States, in Europe, politicians take a very long time to make decisions. It takes a lot of time to approve and reschedule meetings. The European car is very slow. If this continues, America may take the lead in the post-crisis recovery race. The crisis affected the United States no less. But unlike their European partners, they can make any decisions in a noticeably short time.
This fundamental will be reflected in the technical picture of the EURUSD pair. This is especially clear on the monthly chart. Still, the best tactic is to sell the pair after growth.
The EURUSD pair is trying to recover. But in an ongoing pandemic, sellers show themselves as soon as the pair grows back. On the daily chart, the price is near the descending moving average. And all this happens inside the descending channels, and even at the lower border of the global triangle. From a technical point of view, this market positioning implies the continuation of the southern trend. However, the eagerness of buyers to enter at profitable low levels does not allow the trend to continue. As a result, we have a swing in the flat. Bears sell on growth, bulls buy on decline. Here you need a good trigger to push the Market. And it may happen today. The first attempt will be made at the time of the release of US GDP data. Second attempt during the fed's press conference. The EURUSD price will be subject to increased volatility. But it is possible to move “back and forth”. As a result, the price will return to its previous levels, from which it will be possible to forecast more clearly.
While in the current conditions, nothing should be touched, even if the price rises above the market entry level (1.0866), we should still expect a resumption of the downward trend. This means that the growth of the pair should be considered as an opportunity to sell at more profitable levels. In the case of a rising pair, sellers should not be made worse by selling on every rise. You need to allow the price to overcome the distance to the previous daily peak (~1.0980). Near this level, sellers can be activated. Within the current southern trend, there is still confidence about the direction of movement. This facilitates tactical maneuvers.
The EURUSD pair on Thursday sharply tore North, breaking through the bottom-up border of the hourly channel, thus ending the multi-day red tape in the side corridor. Traders decided that they should buy. Well. The movement has appeared, we are working with it. When I reached the level of 1.0962, I manually sold 0.01 lots (I didn't wait for the price to equal the previous peak on the daily chart and trigger a pending order). All the same, if up — means up. But if down, then the distance traveled would not want to miss. So I sold it manually. Thus increasing the total volume of the transaction twice, to 0.02 lots. At the same time, the level of the first entry into the Market (1.0866) moved exactly half the distance closer to the current price level. If the initial entry was at 1.0866, now it is at 1.0914.
At the time of writing the review, the pair has already overcome the previous daily peak and continues to move higher, already to the next power level ~1.1117. Where the pair should be sold again. If you double the volume again, up to 0.04, you will be able to count on more than a thousand profit points multiplied by 4, which is quite good. If the level of 1.0990 falls before the onslaught of the bulls, and they can push the price North, closer to the next daily peak, then the bears will aggressively protect the height, because in the current situation, it is a mistake to buy risky assets.
The previous daily peak at ~1.1145 is psychologically significant, because it is located near the upper border of the weekly southern corridor (it looks good on the Daily). In addition, if this is a correction within the downward trend, it will be too long after reaching 1.1145, and it is time to continue the trend to the South. But we can assume that the pair can continue to grow until it becomes clear that the cancellation of restrictive measures was hurried.
We are talking about the second wave of the crisis. For example, in Germany, the number of diseases has jumped again. And in the World in General, the spread of the virus has not yet been contained. It is not clear what opening of economies politicians are talking about. The virus is not defeated. And people will be put in serious danger if they are released from their homes. The crisis will strike again. The quarantine will continue.
The growth of the EURUSD pair should be considered as a sale at a better price, i.e. sell on growth with the goal of parity (~1.0014).
The flexibility of the account allows you to go into a safe drawdown. No matter how far North the price moves, I will be able to pull my entry level closer to it (to the current one). At the same time, the volume will increase, which is the desired outcome. That is, when the position reaches the parity level, it will be at least 0.04 lots.
Well, if the “unthinkable 'happens, and the price of EURUSD, breaking out of all channels, goes further North, then it should be allowed to trade calmly to the 'unthinkable' level - the first daily crisis peak ~1.1460 (I put the Sell Limit lower: 1.1404). In this case, the risk premium will increase to 0.08 lot. And this is the distance of 2000 points to parity, multiplied by 8. After this scenario, if the position goes far South into the positive zone, you can look at entering the Market with another instrument.
The zone of the first crisis peak ~1.1460 is almost the last line of defense of the bears. Reaching this area will mean deciding the fate of the entire trend. This is either a continuation to the South or a u-turn to the North. Therefore, if there are clear signs of the intention of the price to continue moving up, you should conduct a special operation to exit sales, while not fixing a loss. In case of a negative Outlook for an open position, the maximum approach of the entry level to the current price will be made. This will allow you to 'jump out' without losses from a bad deal.
But this scenario is too sad. Although, during the time of observing the Market, I noticed one pattern: All the worst that can happen-always happens. There will be no miracle. Knowing this, the trader should worry in advance about what he will do if he goes into a 'no-exit' drawdown. A trader is not a God. It is impossible to always correctly determine whether a global trend is continuing or is already unfolding. Practice shows that in about 6-7-8 cases out of 10, the trader opens the correct positions. And to close the gap on the wrong positions, you should apply mechanical influence on the situation. In my case, trading is conducted on the MetaTrader 5 terminal, which allows you to correct these most erroneous market entries when trading on the Netting type of transaction accounting, getting away with it in the literal sense.
ADVERTENCIA DE ALTO RIESGO: El comercio de divisas implica un alto nivel de riesgo que puede no ser adecuado para todos los inversores.
El efecto de apalancamiento crea un riesgo adicional y una exposición a las pérdidas. Antes de decidirse a operar con divisas, considere cuidadosamente sus objetivos de inversión, su nivel de experiencia y su tolerancia al riesgo.
Podría perder una parte o la totalidad de su inversión inicial. No invierta dinero que no puede permitirse perder. Infórmese sobre los riesgos asociados al trading de divisas y pida consejo a un asesor financiero o fiscal independiente si tiene alguna duda.
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