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EURUSD: 3 Reasons Why I’m Not Selling

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The EURUSD sold off from a key resistance area on Friday.

We discussed this on Friday, and I also pointed it out in Saturday’s Forex forecast video.

However, I think traders need to be careful here.

A long upper wick like the one that developed on Friday indicates an increase in selling pressure.

It’s what we often refer to as a pin bar. In this case, it’s a bearish one.

But there are three reasons why I’m not selling the EURUSD here.

The first is that the pin bar in question occurred on a Friday when volume tends to be lower, which is especially true in December.

Lesser volume means there’s a higher chance that Friday’s selloff won’t garner follow through from bears.

Look no further than what happened on December 6.

The pair carved a bearish engulfing candle on a Friday and even closed below the key 1.1070 level.

Yet the next week sent the pair on a 140 pip rally.

That doesn’t mean all Friday signals are meaningless, but it is worth noting.

The second reason I’m not selling is the fact that EURUSD is trading in a sideways range.

In fact, the pair is in the middle of an ascending channel that has developed since the year-to-date low.

We even saw the euro carve a higher low in November.

And thirdly, key support is too close to the current price to justify a position.

That 1.1070 horizontal level combined with channel support around 1.1050 doesn’t leave much room for those interested in selling the EURUSD.

Then again, I could say the same about buying the pair, which is why I’m a fan of doing nothing right now.

As I wrote on Friday, until we see the EURUSD break out from this range, it’s going to continue to be a difficult pair to trade.

But I do think 2020 will offer the long-awaited momentum we’ve been waiting for.

Want to watch the EURUSD video I just released in the member’s area?

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EURUSD ascending and descending channels

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8 comments
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André Gomes says

Hi Justin, thanks for your great content. May I ask why did you not put something on NZDUSD , daily pinbar meaning for a reversal coming along ?

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david says

thank you bannet for great three reasons its sounds greats

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Thankyou says

<3

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Smart Fyneface says

Thanks sir Justin

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Ivan Baychev says

Hi Justin, THANK YOU VERY MUCH – it is very very good explanation

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sunday says

Justin, can you see that your reasons are justified, as the price head towards the North.

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