EURUSD Outlook

fxtradex6 Wed Oct 26, 2011 6:30pm EST 2 Comments

With the EU on the minds of many I thought i’d provide a little analysis. As far as the long term outlook goes, we have untouched supply in the 1.5000’s. Personally I don’t think we’re headed there anytime soon. So if I’m correct and we are in fact not headed upward, there lies the question “Where is demand?”. Let’s answer that with the next chart…

So, where is demand? Looking at a close up view of the chart above we can see that the only level of significant demand, demand that has been untouched, lies in the range of 1.1800 to 1.2525. This also aligns with a recent bank target released publicly some weeks ago. Unfortunately I don’t remember which bank it came from so I can not provide a link to the report.

If we look to the daily chart, supply levels are revealed for potential short positions (Red Lines). This is in fact why I stated that I wanted nothing to do with going long the EURUSD today, and to be honest the first short prospect doesn’t look all that great either considering the consolidation we’re getting right below it. This can often mean the impending death of a supply or demand level. The best advice I can provide, just sit back and watch the show. A better opportunity will arise sooner or later.