Forex Market Analysis [01/02/2020]
Welcome to another weekly Forex market review. In these blog posts I show my opinion on the week ahead and the trades I will be watching. These are not trades I am taking or advising you to take. This is a platform for me to share my opinion on the market and to share my ideas. If you have your own opinion on what the upcoming week could hold, comment below this post and let me know.
Firstly, I will be showing the EURO FX VIX. This is a 10 year monthly chart to show the volatility within the foreign exchange markets. As you can see volatility within the FX markets is very low and the markets are not moving with the same ferocity that they would normally. Last week the EURO VIX was at 4.29 so there has been an increase in volatility within the currency markets. This is probably due Brexit news and the world health organization coming out with statements about covid-19.
Im testing out a new charting setup. If you like or dislike this, please let me know.
Below you can see a chart of EURUSD. We are currently in a downtrend and have been for almost 8 months now. I have placed a pitchfork onto the high and as you can see price has respected it a number of times. On the left hand side of the chart I have placed 2 white lines where price could turn. The bottom line is the one that I will be paying most attention to at the moment. There is also the Fibonacci tool on the chart. We will get to that when we zoom in.
There is also a new indicator that I am testing out. This is a entry indicator that I am going to be testing. As you can see, it is getting close to the 70 line, which will indicator that a move lower could take place soon.
As you can see, there are quite a few areas that I think price could turn. This could be a trade where you put in a limit order and you miss out on a great trade. There are three main areas that im looking at where price could turn.
This will be the area where Ill be placing my limit order. The risk to reward ratio is 5, which is a great trade. Stop loss at 1.12393 and take profit at 1.07463. This is a symmetrical move to the downside, so remember to move stop loss to entry as soon as you feel comfortable. For me I will move my stop loss to breakeven as fast as possible without it being too close.
The next trade that im looking at is GBPAUD. This is a trade that has been a loss for me last week. I will be entering it again at a higher price level. As you can see there is a large Fibonacci retracement that could come into play next week. I will be entering about the 0.705% area which also lines with a smaller Fibonacci retracement area that I will show later.
As you can see, this is a smaller Fibonacci retracement but the two Fibonacci retracements line up beautifully.
I will be entering at 2.00911 with a take profit at 1.75618 and a stop loss at 2.07495. This has a risk to reward ratio of 3.84, which is a great trade as well. I like to see trades that are over 3.
If you are entering any of these trades during the week or have an opinions on the market. Comment below and let me know! I am always open to hearing other traders view on the markets. These are just my ideas for the markets and I am not a professional trader or financial advisor.
My weekly Forex tips area great if you are starting to get into trading or are interested in improving your trading. You can find them here on the Forex blog page.