Looking forward to buy EURUSD from the major support

Yesterday was a bank holiday in the USA. Therefore, volatility was very low in the market, and there were mostly ranging moves. Earlier in the Asian session, RBA kept the official cash rate unchanged at 2.5% as expected, and the statement too was more of a neutral citing a wait and see policy as forecasted in the yesterday’s post.

Today, we will discuss about a potential buy trade for EURUSD. EURUSD is approaching 200 MA (Moving average) on the daily chart as shown below, which can provide a strong support in the short term, and might cause a retracement for EURUSD. I also think EURUSD is due for a correction after a 20 candle bear ride on the 4 hour chart.

On the 4 hour chart, there are several supports like 1.3160, 1.3130 and 1.3090 as plotted on the chart below. We should be looking to buy EURUSD from any one of these support. In order to enter a buy trade EURUSD needs to make a stop at any of these support levels, and then form a bullish divergence on the 4 hour chart along with a bullish candle pattern on the 1 hour chart and MACD changing itself to the upside. Initial target should be the opposite Bollinger band on the 4 hour chart, and final target should be around daily 20 MA. Stop should be triggered on daily close below the 200 MA on the daily chart.

Today, we have US ISM manufacturing index data coming out later in the US session. ISM manufacturing index is expected to fall this time to 54.0 from the previous reading of 55.4. Any reading around 54 or below 54 can be very negative for the US dollar as investors are building up for the next FOMC meeting, and on the other hand, anything above 55 can turn out to be USD positive. Other than this Australian Gross Domestic Product (GDP) data is also scheduled in the next Asian session, which can act as a catalyst for all the Aussie crosses.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURGBP, USDJPY, USDCAD and GBPCAD.
Get it HERE: Vladimir’s Markets Forecast

I wish everyone a Green week ahead. Happy trading!