Pure Price Action Analysis has defined the market behavior of the three (3) correlated pairs that is keeping the 'LID' on the #EURO until now. As mentioned after failing to trade through 1.1380 on the way higher and declined back towards below the 1.1250 have kept the EURO on the defensive. As #CABLE responds to the renewed strength of the USD as the DXY - Index stays above the 95.50 for now while touching a session high @96.15 in late US session. GBPUSD trades below the 1.3180 to this writing.
EURO's negative pressure would exist for as long as the impact relative to the #EURGBP Cross rate would prevail as it failed the corresponding resistance @0.8725 that created a 'divergent trend' with the EURUSD that resulted to a serious pullback to its current levels @0.8510. Whereas it is also meeting cross trading activity due to uncertain investor's shifting towards alternative pairs such as the Japanese Yen related crosses.
Comparative Chart Analysis: DXY EURUSD EURGBP CABLE
Having these three (3) currency pairs at hand will be focused as a new TUG of WAR emerges between the #USD, #EURO & #EURGBP; while monitoring #CABLE prices. This would lead to a more accurate reading of the direction of the EURUSD. However, traders who does not have any existing positions on the single currency, can navigate new trades in the EURGBP Crosses (Evening Star Tech Pattern) as an alternative strategy. Again, application of a cross trade between the three pairs is more appropriate to have a fairly good net result as the USD gains more strength above its current levels. NOTE: Do not discount the session pullback in prices as end-of-the-month trading activities conclude for institutional trades.
This analysis is effective for now purely on a "Price Action' without the relative influence of the upcoming reports towards the week.
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Re-balancing of RISK requires these type of structured trade positions to get better results at the end of its effective period of time exposure.
ReplyDeleteAn OVERLAY chart of the USD, EURUSD & ERUGBP
ReplyDeleteLINK: https://dwq4do82y8xi7.cloudfront.net/x/zNmlpDS6/
The ability to trade well can only be derived from actual experience over the course of trading years. Glad to share the market insight, but learning to apply this approach can only be through a proper supervision. It takes more tan simply copying a trade! Learn to ADAPT! ONLY THE BEST FOR YOUR TRADES! email us at info@megatrade101.com
ReplyDeleteAs an alternative strategy, whenever trading the EURGBP Cross rate, a certain process needs to be followed: 1st- determine the direction of each currency pair & price objectives. Monitor CABLE price action as it would provide clear cut price direction more than the EURO on the way higher. and the 2nd process simply applies for the opposite direction.
ReplyDeleteFollow-up on CABLE prices as it recovers from UK manufacturing data shifts market prices lower for the ERUGBP influencing EURUSD decline as of this writing. EURGBP @0.8406 levels at the early European session
ReplyDeleteThis is where #CABLE fits into the equation, when we made mention of a 3 plus 1 whenever called for which reflects a cross trade strategy insuring the gains made by protecting any adverse changes in the market. On the other hand, cashing in on the gains of the 3 trade positions can be more sensible as the end of the quarter has just been concluded based on the schedule of trade position adjustments.
ReplyDeleteAll told the 'Sequence of Trades' related executions since the month of May has been followed to the letter based from the changing market conditions
ReplyDelete