Daily Outlook for EURUSD

Attached is the 4H chart for EURUSD. Yesterday, i had mentioned that a lot of pairs were moving in unison and looking to break out of long term resistances and supports. 3-4 hours after writing that article, a curious thing happened. Many pairs did manage a small break through but after a couple of hours they fell back into the range. This can be clearly seen in the attached chart where there is a break through resistance but the close of the bar was again within the range.

The same curious thing happened with USDCAD as well. This was enough sign that the break through was false and also enough sign that it was a good time to short, which we did and we got 122 pips out of the EU short.

Now, again, we are back into the range and this fall down has been a nice retrace. Since the fall yesterday, there has been a nice bounce from the support area at around 1.4140 and now we are in the middle with this pair thinking what to do next. I believe that this range would continue today and what i have been saying for the past week or so continues today as well, buy dips. This retracement has provided a nice opportunity to buy this pair.

For today, on the downside, there is strong support at around 1.4150. Any hard break of this price would lead to 1.41 and then 1.4060. On the upside, there are resistances at 1.42 and then at 1.4250 and then 1.4290. Play this range with bias to the upside. Any break of 1.43 should be a sure sign to go long or add to longs. Any break of 1.4060 would be a sign to short.

Daily Outlook for EURUSD

Attached is the 4H chart for EURUSD. This pair now seems to have got very interesting. The bounces have become higher and higher. This is a very important point to note. Previously, when there were llots of ranging, this pair was bouncing between 1.38 and 1.40. Then , after a few weeks, the bounces happened between 1.4 and 1.42. But lately, we can see that this pair has not gone below 1.4160.

All this shows that this pair is having higher bounces and getting ready to break upwards. We can also see that USDCAD and USDCHF are about to break through long pending supports and we can also see that GU also has started approaching the top of its range. Pairs usually move in unison and by the looks of it, all the pairs now seem to be setting up to move through their very strong supports and resistances.

I have been advising to buy dips on this pair and the same advice holds good today as well. If we do see a break of the resistance at around 1.43, wait to confirm the break and go long. Any approach to 1.42 would also be a good opportunity to go long.

The supports for today exist at 1.4221, 1.4160 and then at 1.41. The resistances for today exist at 1.4280, 1.4330 and then at 1.4360. I guess we are setting up for a move to 1.45 and then to 1.46.

Daily Outlook for EURUSD

Attached is the 4H chart of EURUSD. This pair continues to have the same old story of ranging, ranging and more ranging, the only difference being that now, for the past week or so, the ranging has been at higher prices and also the range has started to become smaller and smaller.

This pair has simply refused to fall much below 1.4150 which shows that there is a lot of underlying strength. It is fascinating to watch this pair range so much though i do understand that this could be a nightmare for swing traders.

Unless 1.4150 is cleanly broken and the price continues to stay below that for a couple of hours atleast, i will continue to be bullish on this pair and will continue to buy dips. Any price movement towards 1.4150 should be an ideal opportunity to buy and any move below 1.4150 should be the trigger for us to reverse and go short.

For today, i expect some more ranging with 1.4150 serving as very good and strong support and resistances at 1.4250 and 1.43. It would be interesting to see if this range is broken this week.

Daily Outlook for EURUSD

Attached is the 4H chart for EURUSD. This pair has had a very good drop over the past few hours and this throws up an interesting picture now as to the future direction of this pair. So far this week, this pair had appeared highly bullish and it had threatened to finally break out of its big range of 1.38 to 1.42-1.43.

In fact, it had refused to fall down and had started to break through several resistances which showed that this pair was being highly bullish and led everyone to believe that we might finally see a break of previous highs and then move on to 1.45. But now, the situation seems to have changed totally and this pair has now broken through its strong support at 1.4160.

As you can see from the chart, this break had also been in a very long bar which tells you that this break could be a clean and true one. If the break had occurred on a small bar, then it most likely would have been a false break but the fact that it has occurred on a long bar shows that it could be a true break.

This pair has now entered into a congestion zone which extends till 1.4100 which means that the move down would be slowed down a bit. For today, i expect the price to make a small retrace to 1.4160 or 1.4180 and then continue the fall. A break of 1.4100 would accelerate the fall and then we could see the pair slowly moving down to 1.4050 and then 1.40. Back into Range !!

Daily Outlook for EURUSD

Attached is the 4H chart. This chart clearly shows how this pair has been caught in a very tight range for the past couple of days. In fact, this pair has moved about 20 pips in the past 2 hrs !! As was predicted yesterday, this pair has been tightly ranging so far.

A very important thing to note here is the fact that this pair has refused to fall even after a couple of days which is different from the scenario that existed the last few times when it reached this price. In fact, everything looks so much set up now for the next move past the tough 1.42s which has a lot of resistances in between.

It is very clear that unless 1.4160 is broken on the downside cleanly and with force, this pair will continue to move up. So, any approach to 1.4160 can be easily and safely bought until this support is broken.

For today, buying dips would be the best way to go as far as this pair is concerned. There is a couple of major news to be released today which could determine the next direction of this pair. For today, on the downside, there is support at 1.4160 and then at 1.41. On the upside, 1.42s is full of resistances and previous highs with resistances at 1.4240, 1.4275 and then 1.43. Buy Dips !!

Daily Outlook for EURUSD

Attached is the 4H chart for EURUSD. As was expected, this pair has broken through some major resistances over the last couple of days and is now taking some rest. It has had some minor retracement yesterday and it is now taking some rest contemplating the next direction.

This pair has indeed broken through the same major resistances sometime back as well. The major difference between then and now is the fact that this break has been followed by a slowdown and a small retracement only whereas the previous breaks have been followed by immediate selling and immediately this pair has done down.

The fact that this pair has not immediately fallen down and is now resting close to its support shows that maybe, just maybe, this pair has enough strength now to break through the resistances in 1.42s. We will have to wait and see. We will know it this week.

On the upside, as usual, the resistances exist at 1.42 and 1.4260 and a clean break of 1.4260 will open up 1.45 to 1.46. On the downside, we have strong support at 1.4160 and then at 1.41. For today, i expect 1.4160 to hold up the price and i do not see price falling below that. You can go long on any approach to 1.4160. Any break of 1.4160 can be shorted but we should be looking for break of 1.4260 to add to our longs.

Take Those Losses !!

One of the toughest thing to do for any trader, novice or professional is to accept losses and take the losses. Lot of the time, we have this tendency to hang on to the losses that somehow, just somehow, things would turn around and we can then get out at break even. And to further add fuel to the fire, occasionally, we find that after holding even after huge losses, sometimes the trade turns around and it comes back to our price and helps us get out at break even. Or most of the time, what happens is that we get out of a trade with huge losses only to see the price turn around and come right back to our price making us feel 'if only i had held for just 50 more pips !!'...sigh....

Though, on the face of it, the above 2 scenarious point to the situation where you might feel that it is good to hold on to losing trades, lets consider these points. Usually, when we hold on to losing trades, it most probably means that our system and strategy has gone for a toss, our money management is all screwed up and in effect, we are no longer in control of the trade. We allow our drawdown to pile up, the loss is way more than the stop loss. What this does is that it stops us taking other trades, either because we dont have the money due to large drawdown or we are simply too focussed on getting out of the losing trade that we dont see obvious setups or we are too scared that we might increase our losses by taking more trades and hence refrain from taking trades.

So, the losing trade not only makes us lose a lot of money but also stops us taking trades which could have given us some easy money. We could have simply cut our losses at say, 100 pips or so and easily made that amount by taking 2-3 good trades in a couple of days rather than hold on to the drawdown, lose good trades and finally lose on this trade as well.

Then comes the emotional content where we sit on the computer for long hours hoping and praying that things would somehow turn around increasing the pressure on us and making us a nervous wreck. Believe me, its not worth it. Trading is meant to be simple, easy and straightforward if you do it the right way. Just stick to your system that works, no matter what, take losses, as they are a integral part of trading and that will go a great way in making you a much better trader and a successful one at that. It saves you a lot of money and a lot of tension if you take your losses. It might sound a bit contradictory but try it...It Works !!