Howdy Folks,

First some housekeeping items, over the last few weeks I’ve posted sporadically because I simply needed a break from writing. After finishing my book, I really needed to get away from blogging, trading and go have some fun, so I appreciate your patience. I also pondered exactly what I wanted to do with this blog. I had a lot of ideas but nothing that really took hold until about a week ago. I’m going to spruce this place up quite a bit over the next few weeks and bring on some of that video content I’ve been yapping about forever now. I really wanted to consider how best to help people trade around their day jobs and bring that content to the blog. I think you are going to like the changes, I’m looking forward to it as well.

One of the reasons I haven’t done a weekly video, every week is because often there is nothing to talk about. I’m a long term trader, sometimes it takes days or even weeks to find the right setup and I figured there was nothing to talk about. I’ve decided that regardless of what happens during the week I’ll make a video, if there are no trades to discuss then we will talk about technique.

Finally, I’m going to focus on EUR/USD trading with this public blog. I’ve talked about this before but starting with this post, I’m going to make good on that promise.

EUR/USD Approaching Supply

Let’s start with a look at classic supply and demand analysis. The daily chart is moving into a level of supply that initiated a large sell off last month. I’m willing to bet there are plenty of traders looking to short this level assuming a 1,2,3 top is building, but I’m not convinced yet. Fundamentally the dollar is effectively a punching bag at this point, folks in the media are even discussing it’s use as a carry trade funding currency now. I personally think this supply level is a stopping point for a move much higher.

Where Might EUR/USD Head Next?

Using some Fibonacci analysis we see the last turning point correlated with a 61.8 percent retracement. During a healthy trend, retracement ratios tend to correlate with extension ratios. In this case, 61.8 percent would correlate with 161.8 percent. If the Euro is able to break above supply I think a medium term target of $1.54 is possible. That price target happens to correspond with support that gave way during the financial meltdown of 2008. Take a look at where $1.54 falls on a weekly chart, you’ll be surprised to see where it lines up.

Best of luck,

Ryan

IMPORTANT NOTICE: These comments are for information purposes only. My opinions or other information contained in this post do not constitute investment advice. It should not be understood as a direct recommendation to buy or sell any currency contract or other investment vehicle. Forex trading involves substantial risk of loss and is not suitable for all investors.