FX Market Analysis – EURUSD October 2020

*Live market analysis of the EURUSD FX currency pair with my favourite trading opportunities*

Welcome back to the blog. In this blog post I am going to share with you my updated technical analysis of the EURUSD FX currency pair and show you where I see potential trading opportunities in the next few days and weeks.

If you haven’t already done so, I recommend you read my previous higher timeframe technical analysis of the Euro Dollar currency pair. It explains my long term views on this currency pair and where I see price moving through the next few weeks and months. The link to that blog post can be found below.


EURUSD daily timeframe chart.

There are a couple of points on the daily timeframe chart that support a medium/long term bullish outlook. The first is the daily 50EMA crossing above the 200EMA back in June and from there the 50EMA has remained firmly above the 200EMA. Price is also trading above the daily 50EMA and bouncing off it upon retesting.

In regards to technicals, I can see a few key trendlines and trend waves that support the idea of buying in this current price zone. I have drawn on a long term bullish trendline on the chart above and I think this should act as support for future buying of pullbacks.

The next chart shows the 4 hour timeframe and I have outlined, in more detail, some key points of technical and trend analysis.

EURUSD 4 hour timeframe chart.

The 4hr chart is a good timeframe for intraday technical analysis and looking at near term price movements. You can see more clearly on the chart above how price now has the potential to climb on up to 1.20 with price being supported by a bullish trendline (higher low confirmed) and breaking out through a previous bearish trendline.

If this bullish trend is to continue then the next bounce off of that trendline and higher low could be a very simple yet effective and rewarding long trade. Using the fibonacci retracement tool on the previous swing high and swing low I have projected the potential reversal levels. By layering these on top of the trendlines I can see that the price zone around 1.17500 has the potential to be a future reversal point.

I will be looking to see if price makes its way back down to this price zone in the next few days/weeks. A price reversal and higher low forming there should see the next bullish wave of this trend start and that has the potential to take price up to the 1.20 resistance zone and beyond if the past is to repeat itself.

EURUSD weekly timeframe chart.

The weekly timeframe chart shown above shows the scenario that occurred back in 2017 where price bounced off of 1.20, retraced down to around 1.15800 before going on to reach multi year highs at 1.25. This is the pattern that I see repeating itself through the rest of this year.

The rejection of the 1.20 price level has occurred and price then sold off and retraced down to almost 1.16 before recovering some what in the last 3 weeks of trading. I think 1.25 is a good long term upside target if price action remains bullish and the daily timeframe remains above the 50EMA.

M1 Money Supply (USD) vs SPX stock index

The chart above shows the current m1 money supply of U.S. dollars in relation to the current market price of the SPX (S&P500) stock index. As you can see, since the coronavirus pandemic hit and stocks crashed, there has been a large and steady increase in USD money supply which then directly correlates to the new all time highs seen in stocks. In my opinion, this is only going to continue with more dollars needed to support the U.S economy through fiscal stimulus.

The U.S Federal Reserve see no why reason why they can’t continue printing dollars to keep markets and the economy from crashing. So long as the USD is global reserve and other central banks are also printing then they will continue. This should see a prolonged weakness in the dollar which will influence EURUSD long positions.

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Useful Links:

All my technical analysis is done using the TradingView platform. You can get access via the link below.


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DISCLAIMER: None of the information posted on this site is to be considered investment/financial advice. Trading is high risk and you should only trade with money you can afford to lose.

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