The views here are solely based on Technical Analysis techniques using my personal Smart Money approach. Hence, it is important to understand that the trading of CFDs comes at a risk; if not properly managed, you may lose all of your trading capital. To avoid costly mistakes while you look to trade these opportunities, be sure to do your own due diligence and manage your risk appropriately.
TRADE IDEA: BREAKDOWN OF MAJOR PAIRS
2022-11-23 • Updated
Even though we've only witnessed sluggish movements from the Dollar over the past few weeks, the general idea and bias still seem intact and untampered. The bullish impulse however can be seen as "searching for support". This simply means that price is strategically searching for an area with sufficient demand to push prices higher.
The setup above shows a break out of the small range between the 107 and 104 price area with a possible retest of the drop-base-rally demand zone. There is also a divergence from the stochastics as well as the 50-Moving Average contributing to the trade idea.
The 4-Hour timeframe of EURUSD presents us with an interesting opportunity. Here, we see the trendline resistance fitting into the rally-base-drop supply zone and the "golden zone" of the Fibonacci retracement (61.8%). All these present us reasons to expect a decline in prices possibly to the 1.018 area.
GBPUSD presents a case similar to what we've seen from EURUSD, however, from the Daily Timeframe. We see price filling up the Fair Value Gap (FVG) between 1.997 and 1.892 area with a touch of the 88.2% Fibonacci retracement. The trendline resistance is also a contributory factor to consider in favour of a bearish impulse.
AUDUSD is trading inside the descending channel on the Daily timeframe and has just recently given an initial reaction to the trendline resistance and the FVG (Fair Value Gap). Price is however retracing slightly towards the 100-Day moving average which should serve as sufficient resistance to push prices lower. A long-term selling opportunity could be brewing here!
NZDUSD is at the moment 'dancing' around the trendline resistance from April. To the left, we can see the drop-base-drop supply zone aligning with the 76.4% Fibonacci level. Considering the possibility of a stronger Dollar, this looks like a textbook setup for a bearish impulse.
As I earlier indicated in my article this week, I am expecting an upward push from the Dollar as a reaction from the Demand zone I have marked out. The PPI release earlier moved prices a bit but lacked sufficient momentum to cause a significant break of structure - and thus, no change of trend.
It is general knowledge that the Major currency pairs are pairs that have the US Dollar as either the base or quote currency. As a result, our trade ideas for major pairs will begin first with an analytical review of the US Dollar chart.
For those who may be unfamiliar with Price Action trading, the horizontal arrows represent areas where the market structure was broken. As you can see in the scenario above, price broke below the previous low at the two marked instances
Let's start off with a look at the Daily timeframe on Bitcoin. We currently see price reacting to the rally-base-rally demand zone between the 15,600 - 14,300 price area. Price also seems to have found support off the trendline support as marked in the image above. Interestingly, this means the overall bias on BTCUSD is Bullish.
Central Bank Digital Currencies (CBDCs) are virtual national money. The idea of creating such currencies came to the authorities after the success of cryptocurrencies, which also exist only in digital form.