EURUSD Getting Ready For A Bounce Higher!!Hello Traders,
After the ECB interest rate decision and EURUSD falling more than 100 pips, I want to share with you my current 1/4 hour perspective.
I have no doubts about it that the EURUSD is still bullish in the weekly chart and daily chart. Tomorrow I will publish a detailed analysis on the EURUSD in weekly timeframe explaining that.
However, coming back to the short-term view. After breaking the resistance at 1.21475, the EURUSD accelerated the weakness today. But don’t get fooled. These moves are just another pullback to get into a possible bull market again. Why the EURUSD is bullish has a lot of implications in my view (fundamentals, Intermarket, Technical etc.). In fact a lot of Intermarket reasons.
Anyway, in this analysis, I want to give you a small insight into the Intermarket analysis and why I think the EURUSD will probably turn higher soon, once it reaches the area of around 1.2021.
Below the EURUSD chart, you can see the correlations coefficient indicator. Showing the correlation between the EURUSD and USDNOK. You may now think why the USDNOK. Well, there are a lot of reasons which I can’t explain here. But one reason is the correlation to each other. You can see that the indicator is indicating an overall negative correlation in time. Which basically means that when the EURUSD is rising for example in most cases the USDNOK should decline and vice versa. Obviously, we need to understand that they don’t move exactly the same but you can see for example the blue arrow in the EURUSD moving lower whereas at the same time USDNOK moved higher.
Now, having a look at the USDNOK you can see that the market broke its falling trend line to the upside. However, USDNOK is currently trapped in a range between 8.05541-7.62619. The idea is that USDNOK is at the top of the range. My bias is that it will fail to break out higher and falls again and get be trapped in the mentioned range.
So when I expect the USDNOK to trade lower like shown in the chart and taking into consideration that EURUSD has a negative correlation to USDNOK I need to say that the EURUSD will soon bounce higher when USDNOK goes for the pullback.
And that is the view. I am expecting maybe next week the EURUSD to move higher once it reaches the 50% retracement at around 1.20217.
Let’s see.
Disclaimer: Trading is about going with the highest probability, nobody is 100% right and we need to protect ourself in case we are wrong. That is why we need to always use a stop-loss when trading. Trade with care. This my current view, and any view present is not a trading recommendation just personal view. Bitcoin 3.34% -
