CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.51% 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.

USDEUR

Trader thoughts - Trades and set-ups that catch the eye

Chris Weston
Head of Research
Nov 17, 2022
The weekly ‘Trade Off’ is out – Blake and I talk about current sentiment – data and event risk that will move markets in the coming week

– we look at set-ups in Bitcoin, GBP, US500, AUDUSD and many others – take a look

Scanning through the charts, it's not hard to find a whole array of markets pushing key levels – USDCAD jumps out as it holds the July highs and looks to be turning higher – a potential long idea on a swing timeframe, adding on a bullish 3 & 8 EMA crossover. The US500 also gets close attention as it eyes the 200-day MA at 4057, although sellers are impacting on any test of 4000.

We see other markets like USDJPY in consolidation mode, with an inside bar on the daily that needs to rectify – GBPCAD has come up as a breakout candidate and this may roll over, or it may start to bull trend for 1.6000+, but longs are preferred.

EURUSD is undoubtedly one that is getting some real attention from clients, where the net position leans short, with 59% of open positions held for lower levels – using the daily timeframe and I am a buyer of strength through 1.0438 and would look more closely at aggressive shorts through 1.0330 – we’ve seen good supply coming in into the 200-day MA and 161% fibo extension of the Sept-Oct rally, and given this wood to chop, it makes sense for a bout of consolidation after the moves we’ve seen through the Oct/Nov (1.0100) double top.

To get EURUSD pumping lower we’re going to see equities rollover and US real rates moving above 1.50% and at this juncture neither are showing any conviction to move to this script. Many have focused on the sheer breakdown of the US yield curve, with new lows in the inversion potentially being seen as a USD positive.

For the systematic momentum traders, we still see modestly positive 3-day ROC (rate of change) on the daily and price holds above the 5-Day EMA. We can use 3-day EMA crossing the 8-day EMA could be used as a stop if long – naturally this surrenders profits if triggered, but if EURUSD does kick up then you’re still in the trade and it takes out the emotion of feeling pushed into taking profits.

One for the radar and I’d imagine a large percentage of non-automated FX trading clients would have been looking at this very chart.

The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our clients. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.