A Quick Look at the Market… And Our EUR/USD signal
Skerdian Meta • 2 min read
Liquidity is thin today with the UK and US still on a bank holiday weekend, so the moves have been sporadic and unexpected. Now the economic data is out of the way and Europe is heading towards the close as well, so the price action in all forex pairs will slowly fade away.
Still, let's have a look at what the forex market has been doing today since we have a couple of forex signals open.
As you can see from most of the major forex charts, the USD demand has prevailed so far. We saw a USD pullback during the last few trading days of last year which came as a result of profit taking and position adjustment before yearend. So perhaps forex traders are getting back to their long USD positions. Or maybe the forex market is just moving around in limbo.
For me, the latter is more likely. If this USD demand continues tomorrow as well when the market is back to normal, then we may say that the next leg of the USD uptrend has started. Until then, we're only trading water.
USD/JPY has gained about 50 pips since my FX broker opened the platforms for trading a few hours ago, while EUR/USD is nearly 200 pips lower from the early Friday morning high.
The H1 chart setup looks great for our EUR/USD signal
This has presented us with a good buying opportunity in this forex pair. As you can see on the H1 forex chart below, EUR/USD is well oversold with both stochastic and RSI indicators well oversold. Besides that, the 100 simple and smoothed moving averages (100 SMA) are providing support just below the current price and I hope that they do so strongly enough to reverse the price for a couple dozens of pips until the price hits our take profit target.
The H4 EUR/USD chart is sort of oversold as well, but there's still some more room to go. RSI has to reach the oversold area and the 50 SMA in yellow is hanging about 30 pips lower, which might be the turning point. Well, this time we went with the H1 chart since volatility is pretty low and 30 pips lower seems like a long way to go in this sort of market. After all, we're in line with the recent trend as well.