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Today we’re going to talk about the most traded pair which is also one that I don’t cover often – EURUSD.
The pair has been in a free fall since early July and isn’t showing any signs of stopping. The reason I’m covering EURUSD today is due to the open gap from this week’s open.
Gaps such as this have two things in common.
Because this market has been in such a strong downtrend, I’d like to see a close of this gap and then bearish price action to confirm that the trend is likely to continue.
Summary: Wait for this gap to close and then watch for bearish price action. The next key support appears to come in around 1.30.
Next up is NZDJPY. For those of you who know me, you know I like to trade breaks of really well-defined trend lines such as the one NZDJPY is carving out.
The pair has been in a strong downtrend since July 15th and has been consolidating below the 87.50 key level for the past several weeks.
One drawback here, and it has nothing to do with the setup, is that I’m not a huge fan of shorting the Yen pairs at the moment. It’s been pretty clear that the Yen has been hit pretty hard lately as even the weakest crosses have rebounded slightly.
Summary: Wait for a 4 hour close below trend line support and then watch for bearish price action on a retest. Key support comes in at 85.85.
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