Detailed Eur/Usd Analysis

By Casey Stubbs

The Eur/Usd is the most traded currency pair in the world and today I am going to do a detailed analysis that will help you trade this pair in the near future. Please Share this Detailed Analysis to spread the word on this EUR USD analysis.

Fundamental:
Recently the news for the Euro has been good and that is why we have seen a bounce in the pair recently. Fundamentally and technically strong the Euro has moved through some key levels to show possible future bullish momentum. It is always difficult to be sure of the fundamental analysis because sentiment is what is needed to be tracked not the news but rather the response and current market sentiment. For example the current spectacle going on in the United states with the fiscal cliff should make the Dollar weak but in actuality it might make the Dollar stronger because of risk aversion. That is why it is important to hear what traders are currently thinking and believing about a pair but not a good idea to make trading decisions based on that information. Fundamental analysis is always changing and based on interpretation which makes it difficult to make successful trading decisions based on fundamental data alone. That is why a plan that details fundamental and technical information is the best way to set up a successful trading plan.

Technical Analysis:

Lets start out with the weekly analysis and we can see that the market is moving sideways and the 200 period simple moving average supports this by showing flat and it is barely starting to point upwards. See the chart below. You can click the link to get the full picture.

Eur/Usd Weekly Chart

After Studying that chart look at it again and you will notice that the current momentum is bullish and it has been going up for many weeks. So as traders we want to make money so we need to ask ourselves some questions.

Which way is it going?

How can I profit from it?

We can see the bullish momentum is strong but for how long and if it will continue how can we get in at the right time so that we can profit? I like to find some key areas for entry that
will help our timing so that we can profit from the trade. As I am doing this analysis I am thinking about taking long and short entry areas at the same time.

Step one: I am going to identify those potential entry areas. We are currently at an area on the weekly chart that is showing signs of slowdown and resistance. See chart below:
resistance forex chart

 

 

 

 

 

 

 

 

 

 

So we know the price is bullish but also slowing down moving into resistance. So do we short it? I say no for two reasons.

1. Because we there is slow down but not a clear sign of reversal. Many times the market will slow before continuing on the current move.
2. Because we just broke a key level and now that level is a clear level of support that has not been broken yet I would rather wait for a pull back and then go long.

Resistance becomes suppport:
Support becomes resistance.

 

 

 

 

 

 

 

 

This is how I think about trades so I hope it helps you out in your analysis.

Now I am going to go back to the daily to show potential setups for longs since we are currently bullish and there is current bullish sentiment. I have setup a chart that has 4 potential areas for entry. One tip I want to share with you is if you plan your trades in advance and you know where you will get in, where you will get out and how much you will risk then trading is much more successful, fun and profitable.

Swing High Swing Low.

 

 

 

 

 

 

 

I have drawn this points using fibonacci retracement tool which is a great place to place entries because it is a high probability set up that many other traders look at.

Here is one more shot that shows entry points on a wider swing for deeper retracements, using the two swings it gives you as a trader many high probablity bullish entries.
wider retracement entry points

 

 

 

 

 

 

 

These levels will help you also to identify good areas for stops as well if you are planning to go long.

Where to target these trades?

I am going to jump back to the weekly chart to help me find great targets for these trades and also identify potential reversal trades. I want you to notice the .50 Fibonacci retracement area in the chart below. This level shows a great potential target as well as short setup. This level has 3 key points that you should notice, which I believe will make it a high probability area.

1. The .50 fib
2. 200 Ma
3. Key previous resistance area

With those 3 additional signs I will then be more confident in my setups.

Exits and revesals

 

 

 

 

 

 

 

 

Thanks for reading today and please leave a comment to share your perspective on this trade. What would you do differently? What levels are you looking at? Please share this post using Twitter by clicking this link.

 

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  • mazen

    I agree with Trasester, I have been loosing since I joined on Oct 4, 2012 more than 25%.. Every time I write them they claim they are modifying their strategy and I should wait. I dont know if 3 months aren’t enough what does it take?????………May be I should loose all my money first

    I think the best strategy is to make opposite trades of their recommendation for sure you will make money..

    Mazen

  • Arthur

    Hello Casey, I am eyeing a possible long at 1.344 as this is a retest of the October 17 high and .382 of the latest swing high, and also in agreement with the obvious uptrending scenario. Cheers!

  • David Leow

    This piece of analysis is of great help to us especially the newbie traders.More power to you and your team.

  • temoor alam

    great level i think it all make sense as the weekly chart shows that its is going side ways it may go up for a while before it comes down.

  • trader

    thanks for the great analysis

  • okie dokie

    I agree with your analysis, i am bullish euro because the recent C.O.T report are pointing towards a major move up.

  • Joe Jeremiah

    As I was with this Trading Business for almost 5 years now and what I see and read so far. To be honest to say that there is no easy job to be a Profitable Trade/s. You needs a lot of Patient and Have Trust in what ever you see on your charts, please don’t hear too much of the NEWS or else you will get BROKE. Whenever EUR catch a cold, USD will sleep under the blankets. What my opinion is EUR is Bullish!!!

  • EasyMoney

    Ouch! Lol….

  • Rob

    I did my analysis on the weekly time frame and I would of entered long at 1.2975 stop at 1.2627 first take profit at 1.3486 2nd take profit at 1.4025 and let my third position run till I get stopped out. Also, I see a inverse cup and handle forming. on the weekly, Anyone else see it. I am bullish the eurusd to start 2013. I look for price to reach levels, 1.4000, 1.1.4240, 1.4550 to start 2013. We are up against the 200 ema which at times acts like support and resistance. Maybe see some retrace at 1.3350 level before climbing up towards the 1.4550 level.

  • tradester

    So, why then does my ILQ account show consistent losses since August with your investment copier service. How about a refund?

  • Ralph

    I am a learner and what i have learned just now is be patient do your home work dont go to the market, let the market come to you.
    Many many thanks
    Ralph

  • Girish

    I think Euro/US$ is still in downside. After making high around 1.35 in Jan 2012 it is not able to cross or maintain arounf this level. after making a recent high of 1.332 it has been weakening and is down 100pips. Looks like distribution at 1.32 to 1.33 levels and a plunge down on last trading day.

  • José Gomes

    I like your analysis. It is very consistent and technically grounded.

  • Eko

    Good perception and reasoning. Thanks for the great analysis and proper guidance.

  • you are welcome

  • gogyy

    smart and exact
    thank you