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How Traders Use Support and Resistance Indicators in TradingHow Traders Use Support and Resistance Indicators in Trading Strategies In the dynamic realm of trading, traders employ a variety of tools to navigate the continually evolving market landscape. Among these, support and resistance stand out as pivotal instruments, aiding traders in understanding important price levels on the charts. This article seeks to explore the indicators for support and resistance, offering insights into how they can be used to analyse market changes. Why Traders Use Support and Resistance Levels By effectively utilising support and resistance trading strategies, traders may enhance their decision-making processes. Here is why traders use these trading tools: - Entry Points: Support and resistance are crucial in identifying optimal entry points for trades. When the price approaches support, traders anticipate a potential upward reversal, providing a buying opportunity. Conversely, when the price nears a resistance, traders may look for signs of a downward reversal, indicating a potential selling point. - Trend Identification: The levels may aid in identifying market trends. When the price consistently finds support at higher levels, it indicates an uptrend. Conversely, if the price continually hits resistance at lower levels, it suggests a downtrend. When the price rebounds from horizontal levels, it indicates a consolidation range. - Stop Loss and Take Profit: Support and resistance help traders determine where to place their stop-loss and take-profit orders. By setting a stop-loss just below/above support/resistance, traders can potentially limit their losses if the price breaks below support/resistance. Similarly, placing a take-profit order just below/above a resistance/support may help secure potential returns before a market reversal. Trading Support and Resistance Levels Support and resistance act as psychological barriers where price action tends to stall, reverse, or accelerate. Here is how traders may trade with them: - Reversals: Trading reversals involve implementing the entry points concept mentioned above. For instance, if the price bounces off support, traders might enter a long position, expecting the market to rise. Conversely, if the price reverses at resistance, traders might enter a short position, anticipating a drop. - Breakouts: Breakout trading occurs when the price moves decisively through support or resistance. Traders enter trades in the direction of the breakout, expecting the market to continue moving the same way. A breakout above resistance may signal the start of an upward trend, while a breakdown below support could indicate the beginning of a downward trend. Support and Resistance Indicators Various technical indicators are used to identify the major support and resistance points. The TickTrader trading platform by FXOpen has all the major indicators needed to find these levels on a chart. Let us go through the most popular ones in detail and explain how traders can use them. Pivot Points Pivot points are a popular technical indicator used in trading to analyse market trends and strong reversal points across various financial instruments, such as stocks, currencies, and commodities. Although there are many types of pivot points, the main idea is that they are calculated using the high, low, and close prices of the previous trading period to determine key levels: the central pivot point, support, and resistance. How to Use Pivot Points Traders may use the pivot points for the following: 1. Breakout Trading: A bullish breakout involves entering a buy trade when the price breaks above the pivot point (P) or the first resistance (R1) and closes above it, targeting the next resistance (R2). Conversely, a bearish breakout involves entering a sell trade when the price breaks below the pivot point (P) or the first support (S1) and closes below it, targeting the next support (S2). 2. Reversal Trading: A bullish reversal strategy involves entering a buy trade when the price stalls above S1 or S2 without breaking below it, with the pivot point as the first target. Similarly, a bearish reversal strategy involves entering a sell trade when the price stalls below R1 or R2 without breaking above it, targeting the P level. Fibonacci Retracements Fibonacci retracements are based on the Fibonacci sequence and the Golden Ratio, used by traders to identify potential support and resistance points. The Fibonacci sequence starts at 0 and 1, with each subsequent number being the sum of the previous two. Key ratios derived from this sequence, such as 38.2%, 50%, and 61.8%, are used to determine key market points. How to Use Fibonacci Retracements These are the most common ways to use the Fibonacci retracements: - Trend Continuation: In trending markets, Fibonacci retracements are essential for identifying potential support and resistance points. In an uptrend, the market often pulls back to the 38.2%, 50%, or 61.8% level before continuing its upward movement, with these points acting as support. Conversely, in a downtrend, the market typically retraces to these same levels before resuming its downward trajectory, where they serve as resistance. - Reversals: Traders combine Fibonacci retracements with other technical analysis tools like candlestick patterns (e.g., hammer and shooting star) and chart patterns (e.g., triangles and wedges) for additional confirmation. You may monitor how the price reacts at the Fibonacci retracements. If it closes through the Fibs cleanly, it's less likely to reverse. If it shows signs of rejection (e.g., long wicks), the level is more likely to hold. Moving Average Moving averages (MAs) are some of the commonly used indicators. They have many use cases, including identifying support and resistance points. MAs calculate an asset's average price over a specified period, continuously updating and recalculating as new data points become available. This allows them to smooth market fluctuations. Also, the MA is a lagging indicator, which allows it to provide insights into trend strength. How to Use Moving Averages Moving averages are versatile tools and can be used in various ways to potentially enhance trading strategies. - Support and Resistance: The MA acts as a dynamic support/resistance based on the price position relative to it. Traders consider it support if the price is below it and resistance if the price is above it. - Crossovers: Crossovers between two MAs with different periods can help traders strengthen the signals of the support/resistance levels as they reflect changes in market sentiment and potential trend reversals. Donchian Channel The Donchian Channel indicator is a straightforward yet powerful tool for traders. It consists of three lines on a chart: an upper boundary (highest high over N periods), a lower boundary (lowest low over N periods), and a midpoint line ((Upper Boundary + Lower Boundary) / 2). Typically set to 20 periods by default, N can be adjusted to increase responsiveness or reduce noise based on market conditions. How to Use the Donchian Channel Traders may use the indicator as follows: 1. Trading Breakouts: Upper and lower boundaries serve as support and resistance. Traders look for the price breaking above the middle line to open buy trades and close them near the upper boundary and vice versa. 2. Identifying Reversals: Traders may close long positions near upper boundaries and short trades near lower boundaries before the market reverses. Multiple touches increase the strength of support and resistance. Bollinger Bands Bollinger Bands consist of three lines: a middle band (typically a 20-period simple moving average), an upper band (20-period simple moving average + (20-period standard deviation of price * 2)), and a lower band (20-period simple moving average - (20-period standard deviation of price * 2)). These bands adjust based on market volatility, expanding during periods of high volatility periods and contracting during periods of low volatility. How to Use Bollinger Bands Traders may use the Bollinger Bands to determine entry and exit points as upper and lower bands serve as support and resistance: - Trend Trading: Traders can buy near the lower band in an uptrend and sell near the upper band in a downtrend. - Range Trading: Traders look for buy signals near the lower band and sell signals near the upper band when the market consolidates within a narrow range. Final Thoughts Incorporating support and resistance analysis alongside fundamental analysis is crucial for a well-rounded market perspective. Remember, trading carries inherent risks, so it's vital to employ effective risk management strategies. As you refine your analytical approach and gain confidence in your trading abilities, consider leveraging your strategy across 600+ instruments by opening an FXOpen account. FAQ What Is the Support and Resistance Concept in Forex? Support and resistance in forex refer to levels where a currency pair often encounters barriers to moving lower (support) or higher (resistance). These are crucial for traders in making decisions about entering or exiting the market. How Can I Find Support and Resistance? To find support and resistance, traders analyse historical data. They look for areas where the price repeatedly reversed or stalled, often using tools like trendlines, pivot points, and moving averages. How Can I Identify Strong Support and Resistance? Strong support and resistance are identified by multiple price bounces or reversals occurring at the same level over time. The more times the market has reacted at a particular level, the stronger that level is considered. However, it may also mark that point as prone to breaking in the future. How Can I Trade Support and Resistance? Trading support involves buying when the price approaches this level with the expectation that it will bounce higher. Trading resistance involves selling when the price approaches this level with the expectation that it will reverse lower. Is Supply and Demand the Same As Support and Resistance? While related, supply and demand zones and support and resistance levels are not the same. Support and resistance focus on specific levels where buying (support) or selling (resistance) pressure is concentrated, whereas supply and demand zones encompass broader areas influenced by market orders. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
1
EURUSD: Europe’s smooth inflation and U.S. NFPThe most important macro indicator posted during the previous week was the PCE indicator for October, a Fed's favorite inflation gauge. Posted data show that the PCE Price Index increased by 0,2% on a monthly basis, while core PCE was up by 0,3%. Both figures were in line with market expectations. Personal Income was increased by 0,6% for the month, while Personal Spending was higher by 0,4% in October. The PCE Price Index reached 2,3% on a yearly basis. The CB Consumer Confidence in the US in November was increased to the level of 111,7, above market expectations of 110. On the opposite side, New Home Sales decreased by -17,3% in October for the month, highly above market forecast of -3,5%. Durable Goods Orders were higher by 0,2% on a monthly basis in October, modestly below market forecast of 0,3%. US GDP Growth rate, second estimate for Q3 was corrected a bit to the level of 2.8% from 3% posted previously, but was generally in line with the market expectations. The German Ifo business Climate dropped in November to the level of 85,7, although market expectations were on a side of 86,3. The Ifo Current Conditions also slowed down in November to the level of 84,3 from 85,7 posted for the previous month. The GfK Consumer Confidence dropped to the level of -23,3 in December in Germany, again above market forecast of -18,7. The inflation rate in Germany preliminary for November is 2,2% y/y, while inflation on the monthly basis was standing at -0,2%. Retail sales in Germany dropped by -1,% in October for the month, bringing total retail sales to 1% increase on a yearly basis. The unemployment rate in Germany was flat in November at 6,1%. Preliminary inflation estimate in the Euro Zone in November is 2,3%, which is a bit higher from 2% posted for the previous month. Although posted figures are showing a bit of increase of inflation in the Euro Zone in November, still, it did not impact the eurusd market to start a short term reversal during the week. The currency pair started the week at 1,0425 and was mostly oriented toward the upside. The highest weekly level reached was 1,059. The RSI also started a short reversal toward the upside, reaching the level of 40. This level still does not represent a clear sign that the market is ready to start a road toward the overbought market side. The moving average of 50 days made a clear cross, a so-called dead cross, with its MA200 counterpart, which is an indication of a potential for a trend change in the coming period. The currency pair currently stands at sort of a cross-road. On one side, the level of 1,04 represents the last defense for a road toward parity. On the opposite side, eurusd showed that there is currently no strength for a clear move toward the upside. The highest weekly level of 1,059 does not represent any significant level for the currency pair, which might be an indication of a potential another move toward the 1,04 support line. The dead cross should also be taken into consideration, but for a longer time-scale. So, for the week ahead, there is higher probability for testing 1,04 support, while the move toward the upside might be an option only after NFP data, which are scheduled to be released in a week ahead. Important news to watch during the week ahead are: EUR: HCOB Manufacturing PMI final for November in Germany and Euro Zone, Unemployment rate in the EuroZone, HCOB Services PMI final for November in Germany and the Euro Zone, Retail Sales in the Euro Zone in October, Industrial Production in Germany in October, USD: ISM Manufacturing PMI in November, ISM Services PMI in November, Fed Chair Powell speech, Non Farm Payrolls in November, Unemployment rate in November, Michigan Consumer Sentiment preliminary for December.
by XBTFX
EURUSD Next possible moveSAXO:EURUSD Title "EUR/USD Analysis: Bullish Move Anticipated on Monday | Post-NFP Insights" Market Context "EUR/USD has maintained a bullish tone, with the pair holding key levels above 1.0500. Following Friday’s NFP data, traders anticipate continued upside momentum on Monday as the market digests economic updates and dollar dynamics." Technical Analysis *"Monday’s buy outlook is backed by bullish signals: Trend Formation: The pair has established higher lows, signaling persistent buying interest. EMA Structure: Price remains above the 20 EMA and is approaching the 50 EMA on H4 charts, strengthening bullish sentiment. RSI: Hovering above 55, indicating steady upward momentum. MACD: Positive histogram bars with a widening gap between signal and main lines suggest potential for further gains. Key Levels: Resistance: 1.0555 (immediate), 1.0600 (key target). Support: 1.0520 (short-term), 1.0500 (critical level to maintain the bullish bias)."* News Context "Upcoming: Eurozone retail sales data and U.S. ISM services PMI could influence Monday’s session. Previous: NFP results on Friday showed mixed signals, with market participants weighing implications for the Fed’s rate outlook." Call to Action "Will EUR/USD sustain its bullish momentum on Monday, or is a pullback due? Share your insights below!"
Long
by RBSBALA
EURUSD H4 I Bearish Momentum?Based on the H4 chart analysis, we can see that the price has made a bearish breakout at our sell entry at 1.0530, a pullback resistance. Our take profit will be at 1.0435, an overlap support. The stop loss will be placed at 1.0604, which is an overlap resistance. High Risk Investment Warning Trading Forex/CFDs on margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you. Stratos Markets Limited (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Europe Ltd, previously FXCM EU Ltd (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Trading Pty. Limited (www.fxcm.com): Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763), please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com Stratos Global LLC (www.fxcm.com): Losses can exceed deposits. Please be advised that the information presented on TradingView is provided to FXCM (‘Company’, ‘we’) by a third-party provider (‘TFA Global Pte Ltd’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by TFA Global Pte Ltd. The speaker(s) is neither an employee, agent nor representative of FXCM and is therefore acting independently. The opinions given are their own, constitute general market commentary, and do not constitute the opinion or advice of FXCM or any form of personal or investment advice. FXCM neither endorses nor guarantees offerings of third party speakers, nor is FXCM responsible for the content, veracity or opinions of third-party speakers, presenters or participants.
Short
by FXCM
Traps Of Technical Analysis: Navigating The Pitfalls For SuccessTechnical and fundamental analyses are cornerstones for understanding how financial markets operate. While technical analysis focuses heavily on graphical representations and past price data, it can lead to significant pitfalls—especially when employed thoughtlessly. This post explores common traps that novice traders often fall into. 1. Indicator Overload One of the most prevalent mistakes among beginning traders is the overwhelming reliance on too many indicators. The assumption that a greater number of indicators equates to improved accuracy is misguided. In fact, indicators can produce conflicting signals, creating confusion rather than clarity. Many indicators are designed to promote services or websites rather than provide genuine analytical insights. While a handful of fundamental tools can effectively cover most statistical needs, attempting to integrate 20 different indicators into a single chart is unnecessary and counterproductive. Instead, combining a varied set—such as moving averages, oscillators, support and resistance levels, and chart patterns—can yield more meaningful results. 2. Overlooking Fundamental Analysis Ignoring fundamental analysis can skew a trader's understanding of market dynamics. Historical signals based on technical indicators may have been influenced by news events, leading to potentially misleading conclusions. To establish a clear picture, traders should focus on less turbulent timeframes, like the H1, and select periods of low market activity to minimize external influences. Understanding the impact of macroeconomic factors and market makers can significantly enhance the reliability of technical analysis. 3. Misinterpreting Historical Data Traders often rely on backtesting strategies against historical data, but this approach can be risky. Past performance does not guarantee future results, especially in real trading environments. While testing strategies is essential, time-consuming optimization can be a poor use of resources. Due to varying quote suppliers among brokers, discrepancies of just a few points can drastically alter outcomes. Many experts suggest improving trader’s instincts by practicing on demo accounts as a more productive alternative to exhaustive backtesting. 4. False Breakouts False breakouts frequently occur in strategies that depend on channel trading or trend line breakouts. These incidences often arise when market participants react counter to the prevailing trend. For instance, a price surge that surpasses a resistance level may provoke profit-taking from certain traders, potentially reversing the trend. A nuanced understanding of the market's fundamental basis—such as in crypto markets, where large fund involvement can bolster price movements—can help traders evade premature entries. It’s advisable to remain cautious and wait for confirmation through additional price action before acting on a breakout signal. 5. Ignoring Instrument-Specific Characteristics Each trading instrument has unique characteristics that influence its behavior, such as volatility and trading volume. Conducting analyses without accounting for these differences can lead to misguided strategies. For example, cryptocurrencies often exhibit daily fluctuations of 10%, while indices may show changes closer to 2%. Hence, applying identical settings across diverse assets is inappropriate. Understanding the contextual drivers—for example, industry legislation or technological advancements—can illuminate the vulnerabilities of trading strategies. 6. Psychological Traps The mental aspect of trading is often underestimated, with traders falling prey to cognitive biases such as wishful thinking. A signal may appear strong due to emotional fatigue or the desire to recoup losses, yet that doesn’t validate its authenticity. Traders must strive to remain objective and grounded, conducting thorough analyses and verifying signals against fundamental factors rather than succumbing to emotional impulses. 7. Neglecting Timeframe Analysis Focusing solely on a single timeframe, such as H1, can result in missed opportunities and significant oversights. Many traders disregard other timeframes, such as daily and weekly charts, which can provide crucial context to ongoing trends. An upward trend on the daily chart should ideally reflect in multiple candlesticks on the smaller H4 timeframe. A comprehensive analysis of various timeframes can offer a more rounded view and aid in making informed trading decisions. 📍 Conclusion Despite meticulous efforts to master technical analysis, errors and pitfalls are inevitable. Acknowledging these traps and actively mitigating their impact is critical in successful trading. Furthermore, incorporating robust risk management techniques and fostering emotional resilience will enhance a trader's journey. Each mistake serves as a valuable learning opportunity, paving the way for continuous growth and adaptation in trading financial markets. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment 📣
Education
by Lingrid
3
EURUSD InsightHello, Subscribers! It's great to see you all here. Please feel free to share your thoughts in the comments. Don’t forget to like and subscribe! Key Points: - Bank of Japan Governor Kazuo Ueda stated that the prospect of a rate hike is getting closer as data trends align with projections. He added that if inflation is expected or confirmed to rise to 2%, the Bank would adjust the degree of monetary easing at the appropriate time. - Eurozone November Consumer Price Index rose by 2.3% year-on-year, in line with expectations. In response, the Governor of the Bank of France remarked that inflation is slowing and progressing toward the target. This strengthened market expectations for a 25 basis point rate cut by the ECB. - Scott Besant, nominated as the U.S. Treasury Secretary, has raised hopes that he will appropriately counterbalance Trump’s tariff policies. Major Economic Indicators: - December 3: U.S. Department of Labor JOLTS - December 5: Fed Chair Powell’s Speech - December 6: U.S. November Unemployment Rate and Nonfarm Payrolls EURUSD Chart Analysis As previously anticipated, movements are occurring within the 1.03000–1.06000 range. The failure to break above the 1.06000 resistance level significantly increases the likelihood of forming a short-term consolidation range. This week, price action is expected to remain within this range. However, if a breakout occurs, the upper limit is projected at 1.08000 and the lower limit at 1.01000. In that case, we will promptly devise new strategies.
Short
by shawntime_academy
"EUR/USD Bullish Breakout Potential – Targeting FVG Zone"The chart shows a bullish structure with an upward trendline providing support. Price is approaching a Point of Interest (POI) zone, which acts as resistance. A potential breakout above this POI could target the Fair Value Gap (FVG) zone higher up. However, if the trendline support breaks, it may signal a bearish reversal. The scenario suggests a focus on maintaining the bullish momentum while managing risks below the trendline.
Long
by Tranquila369
2
How I identify the best forex pairs to trade: (2)Here is how I identify the best forex pairs to trade: (Publication #2 / Update) In the top left panel, the indicator 'Compare Forex' displays the PERFORMANCE of each major currency. The USD (red line) has been the strongest currency for the past 2 months on H6 charts. By identifying the strongest currency, all that remains is to trade the USD against all the other currencies since they are weaker. = Smooth stress-free charts. I look at my trades 2-3 times a day to see if they are still blue or red. Takes a few minutes. __ DEC 1st UPDATE: Last week, the JPY became the strongest performing currency. The JPY (yellow line) crossed above the USD (red line). When the performance of the USD became weaker than the JPY = The USDJPY PAIR turned down.
Education
by ascension
EURUSD💡The analysis shown in the chart displays technical analysis of the currency pair EURUSD on the daily frame D1. The price is moving within a descending price channel. Pivot Point (P.P) is the dividing level to determine the upcoming trend. If the channel breaks up and breaks the pivot point, the price may head towards resistance (R.1). If the decline continues, levels (S.1, S.2, S.3) will be potential support targets. The MACD is showing signs of weakness in the downward momentum, and may indicate a possible bounce soon. ⛔️Not investment advice, for educational purposes only.
by Adhamcurrency
Heading into 38.2% Fibonacci resistance?The Fiber (EUR/USD) is rising towards the pivot which has been identified as a pullback resistance and could drop to the 1st support which acts as a pullback support. Pivot: 1.0662 1st Support: 1.0496 1st Resistance: 1.0776 Risk Warning: Trading Forex and CFDs carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Forex and CFDs may not be suitable for all investors, so please ensure that you fully understand the risks involved and seek independent advice if necessary. Disclaimer: The above opinions given constitute general market commentary, and do not constitute the opinion or advice of IC Markets or any form of personal or investment advice. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, are intended only to be informative, is not an advice nor a recommendation, nor research, or a record of our trading prices, or an offer of, or solicitation for a transaction in any financial instrument and thus should not be treated as such. The information provided does not involve any specific investment objectives, financial situation and needs of any specific person who may receive it. Please be aware, that past performance is not a reliable indicator of future performance and/or results. Past Performance or Forward-looking scenarios based upon the reasonable beliefs of the third-party provider are not a guarantee of future performance. Actual results may differ materially from those anticipated in forward-looking or past performance statements. IC Markets makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or any information supplied by any third-party.
Short
by ICmarkets
EUR/USD Weekly Analysis"On Monthly: It seems ZigZag bouncing between 1.1200 and 1.0500 Psychological Support & Resistant are getting over and moving down. If FED doesn't lower the interest rate this month, the Bearish move will continue through January due to Trump presidency and change in GOV. All three EMA, 200, 50 and 20 are nicely Bearish. -- On Weekly: It broke through Daily Bullish trendline and broke through 1.0500 Historical and Psychological number and it's bouncing up to mose likely test the trend line again for potentially further Bearish move. All three EMA 200, 50 and 20 are Bearish as well.--On Daily: It is hiting the 1.0600 Resistant . Depending on the formation which can make Inverted Head & Shoulders OR just head down bearish, we can determine our Entry. All three EMA 200, 50 and 20 are Bearish as well. -- On Hourly: It seems it going to touch 1.0600. If it touches and get rejected, then there is a nice Bearish opportunity. All three EMAs are Bullish as of now. But as it consolidate at 1.0600 Resistant, it's most likely squeeze these three EMA befor break down Bearish and cut them. "
by Ha-Lion
EURUSD 1/12/24As we enter the first week of December, our bias remains the same as last week—bearish. While the GBP/USD pair has shifted to a bullish bias, EUR/USD has yet to follow suit. As always, we track price based on our established bias. From this chart, you can see several bearish targets in the form of liquidity lows. If we see a push higher, this may take price into the supply area above and toward the nearest liquidity high relative to the current price. At this stage, we will look for a clear sell setup to drive price back down toward the liquidity levels marked below. If no pullback occurs and price moves lower, aligning with our bearish bias, we’ll look for liquidity highs to form and be taken out as we continue downward. Be aware of the demand zone sitting below the current price, as it may push the market back up if contacted. For now, we remain bearish and focused on sell opportunities. Keep an eye on the daily bias, as it could shift if price holds higher within this range. Trade safe and stick to your plan!
by PipSurfingSociety
Technical Analysis of EUR/USD on the 2H Chart with 200 EMA and 4Technical Analysis of EUR/USD on the 2H Chart with 200 EMA and 47 EMA The EUR/USD pair, on the 2-hour (2H) chart, shows clear signs of movement within a descending channel. In this article, we use the Exponential Moving Averages (EMAs) of 200 periods (white) and 47 periods (gray) as key references to identify the trend and critical trading levels. General Context The 200 EMA is widely used to evaluate the long-term trend, while the 47 EMA provides insights into short- to medium-term momentum. The interaction between these two moving averages is essential to identify potential reversals or confirm trend continuation. Current Analysis Predominant Trend: The price is currently below the 200 EMA (white), reinforcing the scenario of a long-term bearish trend. The 47 EMA (gray) is also below the 200 EMA, further supporting the medium-term bearish bias. Key Technical Levels: Main Resistance: EMA 200: 1.06684. A breakout above this level may signal a trend reversal to bullish. EMA 47: 1.06064. This level acts as an intermediate resistance. Failure to break this level could lead to renewed selling pressure. Key Supports: 1.04992: The first significant support. 1.03822: A psychological support level and potential target in the case of bearish continuation. Momentum Indicators: Stochastic and other relative strength indicators suggest a slight exhaustion of selling pressure but do not yet confirm a reversal. Trading Scenarios Scenario 1: Bullish (Breakout Above the 200 EMA) Entry: Buy above 1.06684 (200 EMA). Target: 1.07156 or higher. Stop Loss: Below 1.06064 (47 EMA). Scenario 2: Bearish (Rejection at the EMAs) Entry: Sell below 1.04992 or after rejection at 1.06064 (47 EMA). Target: 1.03822 (support). Stop Loss: Above 1.06684 (200 EMA). Summary The EUR/USD pair remains under bearish pressure as long as it stays below the 200 EMA. Rejection at the resistance levels (1.06064 and 1.06684) may reinforce the selling bias, while a breakout above these levels could pave the way for a recovery. Key Support Levels First Support Level: 1.04992 Significance: This level is a short-term support and represents a key pivot point. It has been tested multiple times recently, making it a critical threshold for bullish or bearish continuation. Implications: If the price breaks below this level, it could confirm continued selling pressure. Traders might consider this level for a short position if it breaks convincingly, with targets at the next support. Second Support Level: 1.03822 Significance: This is a major psychological and technical support level, representing a stronger area of buying interest. Historically, this level has acted as a floor during significant sell-offs. Implications: A break below this level would likely signal further bearish momentum and could open the door for a test of even lower levels. Traders might look for strong buying activity here as a potential reversal zone. Additional Notes on Support Levels: Dynamic Support: The 47 EMA (gray) may act as a dynamic support if the price closes above it. This is not a fixed level but changes as the EMA adapts to price movement. Oversold Conditions: Momentum indicators like stochastic oscillators or RSI in the oversold zone around these support levels could hint at a potential bounce. Scenarios Around Support Levels Bounce at 1.04992: If the price holds above 1.04992, it could rebound toward 1.06064 (47 EMA) or 1.06684 (200 EMA). Entry Idea: Look for bullish candlestick patterns like a hammer or engulfing candle for confirmation. Break Below 1.04992: A decisive break below this level could lead to a swift move toward 1.03822. Entry Idea: Short position below 1.04992, targeting 1.03822, with a stop above 1.06064. Testing 1.03822: If the price reaches 1.03822, strong buying pressure could emerge as traders look for a potential bottom. Entry Idea: Wait for a clear rejection or reversal pattern before entering long. Potential Support Level Extension If 1.03822 is breached: Next Psychological Levels: Watch for round numbers like 1.03000. Fibonacci Levels: Use a Fibonacci retracement tool to identify additional supports if the price drops further. Conclusion The 1.04992 and 1.03822 levels are critical to watch for short-term and medium-term trading. Monitoring how the price reacts at these supports, combined with momentum indicators, will provide clues on whether the bearish trend continues or a reversal is forming. Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Always consult with a professional before making any trading decisions. Let me know if you’d like me to analyze potential targets below 1.03822 or focus on other specific levels!
by RaffDN
Technical Analysis of EUR/USD on the 2H Chart with 200 EMA and 4Technical Analysis of EUR/USD on the 2H Chart with 200 EMA and 47 EMA The EUR/USD pair, on the 2-hour (2H) chart, shows clear signs of movement within a descending channel. In this article, we use the Exponential Moving Averages (EMAs) of 200 periods (white) and 47 periods (gray) as key references to identify the trend and critical trading levels. General Context The 200 EMA is widely used to evaluate the long-term trend, while the 47 EMA provides insights into short- to medium-term momentum. The interaction between these two moving averages is essential to identify potential reversals or confirm trend continuation. Current Analysis Predominant Trend: The price is currently below the 200 EMA (white), reinforcing the scenario of a long-term bearish trend. The 47 EMA (gray) is also below the 200 EMA, further supporting the medium-term bearish bias. Key Technical Levels: Main Resistance: EMA 200: 1.06684. A breakout above this level may signal a trend reversal to bullish. EMA 47: 1.06064. This level acts as an intermediate resistance. Failure to break this level could lead to renewed selling pressure. Key Supports: 1.04992: The first significant support. 1.03822: A psychological support level and potential target in the case of bearish continuation. Momentum Indicators: Stochastic and other relative strength indicators suggest a slight exhaustion of selling pressure but do not yet confirm a reversal. Trading Scenarios Scenario 1: Bullish (Breakout Above the 200 EMA) Entry: Buy above 1.06684 (200 EMA). Target: 1.07156 or higher. Stop Loss: Below 1.06064 (47 EMA). Scenario 2: Bearish (Rejection at the EMAs) Entry: Sell below 1.04992 or after rejection at 1.06064 (47 EMA). Target: 1.03822 (support). Stop Loss: Above 1.06684 (200 EMA). Summary The EUR/USD pair remains under bearish pressure as long as it stays below the 200 EMA. Rejection at the resistance levels (1.06064 and 1.06684) may reinforce the selling bias, while a breakout above these levels could pave the way for a recovery. Key Support Levels First Support Level: 1.04992 Significance: This level is a short-term support and represents a key pivot point. It has been tested multiple times recently, making it a critical threshold for bullish or bearish continuation. Implications: If the price breaks below this level, it could confirm continued selling pressure. Traders might consider this level for a short position if it breaks convincingly, with targets at the next support. Second Support Level: 1.03822 Significance: This is a major psychological and technical support level, representing a stronger area of buying interest. Historically, this level has acted as a floor during significant sell-offs. Implications: A break below this level would likely signal further bearish momentum and could open the door for a test of even lower levels. Traders might look for strong buying activity here as a potential reversal zone. Additional Notes on Support Levels: Dynamic Support: The 47 EMA (gray) may act as a dynamic support if the price closes above it. This is not a fixed level but changes as the EMA adapts to price movement. Oversold Conditions: Momentum indicators like stochastic oscillators or RSI in the oversold zone around these support levels could hint at a potential bounce. Scenarios Around Support Levels Bounce at 1.04992: If the price holds above 1.04992, it could rebound toward 1.06064 (47 EMA) or 1.06684 (200 EMA). Entry Idea: Look for bullish candlestick patterns like a hammer or engulfing candle for confirmation. Break Below 1.04992: A decisive break below this level could lead to a swift move toward 1.03822. Entry Idea: Short position below 1.04992, targeting 1.03822, with a stop above 1.06064. Testing 1.03822: If the price reaches 1.03822, strong buying pressure could emerge as traders look for a potential bottom. Entry Idea: Wait for a clear rejection or reversal pattern before entering long. Potential Support Level Extension If 1.03822 is breached: Next Psychological Levels: Watch for round numbers like 1.03000. Fibonacci Levels: Use a Fibonacci retracement tool to identify additional supports if the price drops further. Conclusion The 1.04992 and 1.03822 levels are critical to watch for short-term and medium-term trading. Monitoring how the price reacts at these supports, combined with momentum indicators, will provide clues on whether the bearish trend continues or a reversal is forming. Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Always consult with a professional before making any trading decisions. Let me know if you’d like me to analyze potential targets below 1.03822 or focus on other specific levels!
by RaffDN
EURUSD - Short term direction predictionTrend is up on short term timeframes but arguably down on long term ones so this is mixed and we will proceed with only a primary target on this one. The marked price would make a decent short term target as there will be plenty of stop losses sitting above that structure level so I would not be surprised to see an aggressive movement toward this level and maybe potentially slightly higher to capture as many stragglers as possible (This might be handy for people who leave runners on their trades). Also keep in mind that I am only providing potential target levels here. The best thing to do would be to drop down to lower timeframes and look for good areas of value to enter.
Long
by Gamblers-Fallacy