Currency Market Volatility Remains Low – October 20th 2015 FX Analysis
EUR/USD Slips Below Major Support
In yesterday’s commentary we talked about a few key levels to start the week and one of those points was the 1.1340 area. The price has since slipped below that point and one more failed retest would more than likely signal further downside for today. At this point the waiting game begins to see if we will get a valid trade setup from that point. Because I still have an open directional bias on the EUR/USD I would be open to a short from any of the listed upper manipulation points as well as the one lower level we have listed. One of the things I talked about in the members daily market preview video was the potential for a backside of the level setup from our lowest manipulation point for a continuation trade setup short. If your a member make sure to watch tonight’s video for a full break down of that.
The chart below does illustrate an example of what I mean by backside of a level trade setup. It is important to understand that you cannot just take a backside of the level setup from every listed level on the charts. This type of setup has specific criteria that either makes it valid or invalid. Additionally we still need to see an actual stop run of the level. It seems like I get questions everyday along the lines of “how do you know which level to trade from”. The simple answer is I don’t. We have specific entry criteria that either validates or invalidates a confirmation entry day trade setup and that is what chooses the level for us.
Pound Remains Stuck In Range
For the last 3 trading days the GBP/USD has been stuck in a range. Last week Thursday in the live forex trading room I talked about the probability of a range occurring with the Pound. Anytime you have a abnormally large market move, you will often see the market go sideways for a few days. This resting period is quite common and can actually provide many good range trade setups. One of those very setups occurred Friday as the GBP/USD provided a valid day trade stop run short.
As long as that range continues to hold I will look to take any valid stop run reversal from the extremes. The upper manipulation point could also provides a good backside continuation trade setup. The upper level would first need to break and then the price action would need to retest the breakout point with a valid stop run continuation setup.
Forex News For October 20th 2015
UK Carney Speaks 6:00AM Eastern: This is really the only news that I would be concerned with today. All the other speeches during the NY Session shouldn’t have much of an impact. As Carney is speaking 30 minutes before our London trading window ends it should have little impact on the day and be done before the NY trading session opens.
Want to learn the bank trading strategy, join our weekly live training room, talk to members in our forum, and have access to lifetime support? Learn more here