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Price Action Setups: EURUSD at Range Bottom

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The markets were fairly calm today, with the banks in several countries closed for holiday. In spite of this, I’ve put together two setups we’ve been following along with two pairs on my radar this week.

EURUSD closed the day right where we would have expected, at the range bottom around 1.3585. Given last week’s bullish pin bar I think this area looks like a solid buying opportunity.

From here the next resistance comes in at 1.3687, about 90 pips away from current levels. The next level higher up is the 1.3747, which is the 50% Fib level from the high on May 8th.

A stop loss below the tail of Thursday’s pin bar would make buying here a 1:1 risk to reward ratio. As we all know, anything less than 1:2 isn’t favorable. For anyone looking to buy here, just keep in mind that you may have to get a little creative with your stop loss in order to make this setup favorable. One idea is to use the 50% stop loss strategy.

eurusd daily forex chart

NZDUSD was a pair that I covered as part of Friday’s analysis. So far the bearish pin bar has reacted just as expected, testing the .8522 level once again before falling 35 pips to close the day. From here I think the .8415 area is a logical place for shorts to look to take profit.

One word of caution for anyone in this trade is that today’s low didn’t break the nose of Friday’s pin bar. This isn’t a major concern as price action still looks favorable for shorts, but it does tell us that more volume is needed if this pair is going to see .8415 this week.

nzdusd daily forex chart

As for levels I’m watching, the .9390 level on AUDUSD has served as resistance for the past two months. A bearish price action signal at this level could prove interesting. I’ll be keeping an eye on this level throughout the week.

audusd daily forex chart

USDCAD is another pair I’m watching. The 1.0885 level has acted as support and resistance for several weeks now. Another retest of this level as support could prove interesting given the fact that the pair appears to be searching for a short-term bottom.

usdcad 4 hour forex chart

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