The United States has the most Corona-virus related deaths in the world and the fears related to virus together with massive economic stimulus keep driving the global asset allocation away from the US Dollar. Instead, money has been flowing into precious metals and in forex markets lately into Euro and Australian Dollar. The Canadian dollar has been hit due to the close connection between their economy and the US. By reading further you agree with our disclaimer (link) and acknowledge that we don’t provide investment advice.
After a long low volatility decline, EURUSD finally broke out of the bearish channel it was in for approximately two years. Now, we’ve seen a market that has been raging higher, especially over the last two weeks. This violent up move has been fuelled by calls for more economic stimulus in the US.
Key weekly levels in EURUSD:
- 1.1580 – 1.1600 range (Psychologically important level and 50% Fibonacci level)
- 1.1830 – 1.1850 range (May and September 2018 highs and 61.8% Fibonacci level)
- 1.2148 – 1.2200 range (The low of 2018 topping formation and 78.6% Fibonacci level)
If the bulls manage to defend the 1.1830 – 1.1850 range then probabilities for market reaching the 2018 topping formation increase significantly. A failure to hold the level would warrant a re-evaluation of market sentiment and make us look for potential support levels. For a more detailed analysis on EURUSD and for actionable trading strategies ideas, please join our VIP program at www.tiomarkets.com. As we want you to be able to trade these trending currencies (EURUSD, EURCAD, AUDCAD, AUDUSD) and others with 0 commission and tight spreads, we’d like to invite you to take advantage of the best trading account in the industry: Tiomarkets VIP Black. For more details on this truly exceptional offering see here.
Why is the trend your friend?
We’ve often heard how the trend is your best friend in trading. This certainly has been true with those Tiomarkets clients that have been long EUR against USD and CAD lately. Continuous inflows of money from big investment funds creates a demand that is greater than supply. This is a powerful force that moves the prices higher. There obviously will be a point when trends reverse and once the signs of supply-demand balance shift start to become more apparent traders have to be able to recognise this shift and act accordingly.
By focusing on trends we are actually focusing on something real and tangible – something that can be measured. This means we are effectively focusing on what the big money is doing, not on some unrealistic fantasy created by our emotions.
Here at Tiomarkets, we hope that by following our analysis and webinars you will be better prepared for this. As my role at Tiomarkets is to work for your trading success. I’d like you to remember to choose your friends well. Some of us have some bitter experiences after hanging out with the wrong people. This is true with trading also. Some traders make friends with greed, fear and hope. They spend their days fearing markets move against their positions, or hoping that the opposite happens. This is emotionally very consuming and is made worse by their third (so-called) friend: greed. This guy makes traders take oversized bets and over trade which in turn increases their emotional sensitivity and makes them fear and hope even more. I’m here to support you in this tough challenge called trading. Therefore, please listen to me and make sure you seek the right kind of friends. The kind that are on your side.
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