The EUR/USD pair failed to break through the variable support yesterday before the local lows from October 7 and 8 (1.1725 and 1.1732). As a result, there was a rebound with price consolidation above 1.1750.

In this case, we should pay attention to the two factors that helped the euro to reverse its rate:

1. A technical rebound from the area of interaction of trade forces, which occurred at local lows on October 7 and 8. To simply put, the natural basis of a rebound.

2. A correlation between EUR/USD and GBP/USD pairs. Let’s start with the fact that correlation in trading is the relationship of trading instruments (currency pairs), where if one currency rises/falls, then the other can repeat its dynamics, given that there is a connection between them – correlation.

Yesterday, the price of the pound actively rose, against the background of Brexit information. Due to the positive correlation, the Euro turned its direction. As a result, we could observe its intensive strengthening by 10:00-12:00 UTC+00.

Regarding the quote’s current location, you can see that it has returned to the range of 1.1750 once again, where it formed stagnation at 1.1740/1.1760. In our case, the most important coordinates are the level of 1.1725 (low on October 7) and 1.1770 (yesterday’s high). Now, a price consolidation beyond these values may indicate a subsequent move in the market.

Based on the location of the quote and control levels, you can make a trading forecast from a number of possible market scenarios.

First, an upward movement.

An upward movement may develop if the price consolidates above yesterday’s high of 1.1770, which will provoke buyers to increase trading volumes. In this case, the price movement in the direction of 1.1800 is not excluded.

Second, a downward movement.

Market participants are trying to restore the downward trend and face indecision, which leads to the formation of a side range of 1.1725/1.1760. Moreover, there will be a main flow of sellers after the price consolidates below 1.1725 in the four-hour (H4) time frame.


The material has been provided by InstaForex Company –

Leave your vote

🚀If you want to get a Forex Robot Coded as per your trading strategy but are unable to do so because of the high price for the Robot then you can take advantage of the CROWD FUNDING campaigns feature. ✔ These are some crowd funding campaigns for Forex Robots, which when completed can provide the very same Forex Robot to the participants at an average price of $5-$10 per participant. ✔ You either participate in one of the already listed campaigns or send us your Forex strategy : Submit Crowd Funding Campaign , for which you would like the Forex Robot to be coded. A Crowd Funding Campaign would then be started for the same . ✔ All you have to do later on is to share the campaign online with your friends to encourage more people to participate in the campaign.

As a result, each participant can get that Forex robot for just a campaign contribution of $5 (which is the minimum). Participants can back the campaign by anything above or equal to $5 to reach the funding goal to close the campaign.