Daily Outlook for EURUSD

Attached is the 4H chart for EURUSD. Just a glance at the chart tells you that this pair has been ranging for the past couple of days. What is scary though is the fact that the range has been so tight. This tells you that a breakout is around the corner and if and when the breakout comes, it is going to be fast, quick and nasty.

This is a period of consolidation and the best thing to do during this consolidation is to have patience and wait for the price to reach a support or a resistance and then trade accordingly. For eg., all that you need to do is wait for the price to reach around 1.4387 and then take a long and you can exit at around 1.4420. Take a short there again and exit around 1.4390. Keep playing this range and you could have very easily made 80-100 pips on each of these 2 days. But the key here is the wait cos you can easily get impatient and take the wrong entry at the wrong price and this market would then kill you and if it happens twice, next time, you are simply too scared to take the trade even though it might be the right trade at the right price. This is what the market can do to your brain.

Anyway, today would be crucial with a lot of news coming in and i would expect this range to be broken either today or atleast by tomorrow. As i have been saying over the past couple of days, on the upside, the resistance is at 1.4440 and break of this will lead to 1.45 and then 1.46. On the downside, there is support at 1.4380, 1.4350 and then 1.43. Play the range for now and wait for a breakout to take a lot of pips..

Daily Outlook for EURUSD

Attached is the 4H chart for EURUSD. This is an interesting chart which shows consolidation. Does this consolidation point to accumulation or distribution? Only time will tell. This pair did not move much for the whole of yesterday which was to be expected after the breakout on the day before. Right now, this pair is ranging with a small range and between 1.4380 and 1.4440.

The above range needs to be broken for us to take a specific direction. If possible, we have to try to trade this range or else we need to be staying aside, as far as this pair is concerned, and try and take a trade in the right direction once the range is broken.

This will be a very difficult as well as interesting week with so much of news being released throughout the course of this week. This is how it is during the first week of every month and things begin to stabilise in the other weeks. This month would be especially volatile as we are in recession and people are looking for bits and pieces of news to either confirm the recession or to confirm that we are coming out of it. So, news in either direction would cause investors to move in that direction immediately and this leads to the additional volatility this month.

As for today, on the upside, we have strong resistance at 1.4440. If this is broken, we should see this pair move on to 1.45 and then 1.46. On the downside, we have strong support at 1.4380. If this is broken, we should see the pair move down to 1.4350 and then 1.43. I expect the range to be broken to the upside today but i could be wrong !! The key is not to outguess the market but just do what the market tells you.

Daily Outlook for EURUSD

Attached is the 4H chart for EURUSD. This pair, along with other associated pairs, finally had a breakout after so much of ranging over the past many many weeks. The fact that this breakout has come after so many weeks of ranging shows that this pair could go up even further in the short term.

The most surprising thing about yesterdays move has been that the moves have come without even a semblance of any retrace at all. Normally, big moves are followed by some good retraces to about 50% of the entire move but we did not have any retrace of the move yet. This could be a signal of the strength of the move.

Today, on the upside, the next major resistance is at 1.4440. If this major resistance is broken, i dont see anything that is going to stop this pair from reaching 1.46. On the downside, this pair has support at 1.44 and then at 1.4350 and then 1.43.

For today, i would expect some more upside but at a lesser pace as compared to yesterday.