EURUSD Carves Fresh 2018 Lows Below 1.1930

·    May 7, 2018

·      May 7, 2018

·    May 7, 2018


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Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.

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A few moments ago the EURUSD carved fresh 2018 lows. As I mentioned on Sunday, Euro bears have made a habit of this since breaking below wedge support on April 20.

I wanted to bring this morning’s drop to your attention because this is where I see a lot of traders get it wrong.

If you want to swing trade using end of day charts (remember, I use New York close charts), then it’s imperative that you wait until 5 pm EST. Otherwise, you’ll find yourself getting whipsawed by every intraday buying and selling spree.

Here’s an article I wrote on how to interpret the settlement period on a daily chart.

As for the EURUSD, it’s going to take a daily close at 5 pm EST below 1.1930 to open up downside targets. Those targets include 1.1830 and 1.1710.

But without the session close below the 1.1930 handle, we don’t have enough information to make a decision. The fact that sellers have taken out Friday’s low so quickly is a bearish sign. However, it isn’t enough to prompt an entry.

It’s also important to plan for the inevitable relief rally. Sellers are undoubtedly in control at the moment, and I don’t see that changing. But Euro bears just unwound four months of upward to sideways movement in twelve trading days.

It begs the questions: when will sellers reach a saturation point, even a temporary one? Will it be 1.1930, 1.1830 or a much lower level?

Time will tell. In the meantime, I’ll wait to see what happens here at 1.1930.

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EURUSD daily time frame


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12  Comments

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  1. Hi Justin , for cross pairs such as eurjpy , the price is correlated to eurusd and usdjpy as follows :
    Eurjpy=eurusd x usdjpy
    This being the case price movement in eurjpy is dependent on price movement in both eurusd and usdjpy . This applies to all other cross pairs too . Does this mean eurjpy may move due to buying and selling in the two primary pairs eurusd and usdjpy and not buying and selling in itself? This then make price action analysis just on eurjpy not very reliable because price actions in the eurusd and usdjpy. What is your view on this ?

  2. Hi, I had seen an inside bar pin bar combination at 1.1930, I was thinking of a bullish signal, but I was wrong.

  3. Thank you Justin for guide on daily price action. Pls can you relate it with support and resistance.

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