Hello everyone, The market has opened finally, so no more boring for me, I become addicted to trading and I believe that many members here are having the same view. Nothing gives me that rush which I get during trading. Weekends are supposed to be a short period to get some rest, but I feel so bored on Saturday and Sunday even that I have other online businesses to do. Anyway, I hope that you enjoyed the weekends, and you already have a good trading capital to start trading this week. I will call it the "reversal week" because I'm expecting a strong reversal on the US dollar and gold and many other trading instruments.
As you can see, the forex calendar is full of data and events today but most of this data has no impact on the market, that's why I marked the 3 important data and events.
[/LIST]US ISM Manufacturing PMI:
Actually, the expectations indicate that the index will grow by 58.7 points, and therefore if the index reading is better than expected, this may reflect positively on the US dollar, and vice versa. The markets always monitor this data to know the extent to which the manufacturing sector is affected by the repercussions of the new Coronavirus, which has severely affected economic activity in the United States and negatively affected economic growth rates, and given the importance of the manufacturing sector, this data will be viewed with great importance because of its impact on policy decisions. Cash by the US Federal Reserve.
UK Final Manufacturing PMI:
This won't have much effect on the Pound but, it can move it a few pips. This indicator could be a good or bad signal that presents the current economic situation but, for the short term, I think the Pound still has to go lower.
ECB President Lagarde Speaks:
ECB President Lagarde will speak after the EU closing session so it won't make so much impact on the EUR's pair, Lagarde rarely moves the market, so no need to worry about it.
So, the only thing that can move the market is the US data, and you already saw what happened during Friday on the US pairs, the US dollar made a strong positive performance during the trading day, even though its movements were somewhat weak at the beginning of the week’s trading, but the US dollar had got strong support at the end of the week’s trading. This support came mainly from the high yields of US Treasury bonds and the relief package which was approved by the US house.
You know that I already have buy trade on the EURUSD pair, I have added another position today with a 0.1 lot size. So, the total lot size, for now, is 0.4 lot size. I have a 14$ floating loss which can increase soon if the price goes lower. Everything is possible now for this pair but I will hold it as long I'm using an SL level. The USDX seems so strong today and it already made a new high. fundamentally, passing the stimulus package means more weakness for the US dollar. So, I still think that the USD index will go down soon to the 89.19 level again and that means a new high for the EURUSD probably. I'm planning to close those trades at the 1.2220 level which can give me some profits of around 40$.
Unfortunately, this time I have 3 different scenarios on the EURUSD. Let's see them:
I'm expecting this scenario right now, the pair could be moving inside an ABCDE triangle pattern which we can find most of the time on the 4th wave. This triangle pattern is good for scalping and short-term traders. After completing wave E then we the price should be heading up to the 1.24 level again.
If the price will be moving according to this scenario then, we can have a strong upside movement this week to 1.22-1.23 level which should be the 3rd wave. According to this scenario, the current wave is the C wave from the 2nd correction wave. It should end soon. Let's see!
As I already said, everything is possible but I'm not expecting this scenario right now. According to this scenario, the price is moving on the C wave which can reach 1.18-1.17 levels easily before moving up again. As a waves trader, I should expect anything and that's why I'm trading with a small lot size right now, the price can continue the bearish wave to 1.17 and this will cause too much if I'm trading with high risk. Risk management is more important than analysis.
USDCHF waves analysis:
The higher this pair goes, the more EURUSD will fall. USDCHF is trading on the highest level for the last 2 months but I think it's overbought right now and the price has to go down soon. The price has already reached a strong supply zone on the daily time frame and at the same time, the price is approaching the upper line for the bullish channel on the H4 time frame. When it comes to waves counting, the price is moving on the final wave. I think selling right now is a very good idea. The price can start moving down during the US session. The CHF index is expected to move up soon while the USD index should go down. But we should note that the price has broken the bearish trend line on the weekly time frame. So, selling this pair for the long term is kinda risky. You can sell it today and hold it until the next Friday because this week is full of US economic data which should move the market and of course the USDCHF. I will try to wait for now and follow the EURUSD moves, then I will decide when I will be selling the USDCHF pair.
Have a good day and thank you for visiting my trading journal!