The Euro has rallied nicely during the trading session on Friday, as we continue to see the parabolic move to the upside. The 1.12 level above is an obvious barrier based upon the psychological importance of the large figure, but also the fact that we have seen a lot of structural trading back and forth. Beyond that, we also have the 200 day EMA, which should be paid close attention to. It would not be a huge surprise to see this market rally a bit and then break down from there. I have been very patient, because we are in a downtrend so it’s only a matter of time before that takes over again. That is of course unless it’s an actual trend change which is a different type of play for traders to deal with.
EUR/USD Video 21.10.19
If this is a trend change, we will break above the 200 day EMA and then pulled back to it to find support. It is because of the possibility of this that I have sat on the sidelines and traded other currency pairs in this scenario. Looking at this chart, it does look a bit parabolic at this point and therefore I think it’s going to be susceptible to bad news. The market pulling back could be a nice opportunity to start shorting with the longer-term trend. However, if this does change the trend, then a significant amount of support will need to be showed after a break above the 200 day EMA, but more importantly you will have to show patient. If it’s a trend change, this could be an opportunity for several hundred pips so keep that in mind and be patient.
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This article was originally posted on FX Empire
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