Global Daily Insights: EURUSD – October 11, 2024

Current Price: 1.09352
ATR (50): 0.0010
EMA Zones:

• Momentum Zone (EMA 1-8): Price below, signaling weakness.
• Value Zone (EMA 26-50): Price has breached this zone, currently below EMA 50, adding to the bearish bias.

Technical Overview

The EURUSD is currently trading within the GATS 369 Channel, with the price sitting inside the 3x channel. This positioning suggests that the pair is consolidating, but still leaning toward a bearish trend based on the overall market structure. The Global Time Bars on the M60, H4, and D1 are all red, confirming a bearish outlook across multiple timeframes. This alignment is crucial as it provides a triple-screen confirmation, affirming the direction of the downtrend.

GATS 369 Channel Analysis

The GATS 369 Channel plays a key role in identifying potential trade entries:

• Break Below x3: A clear break below the x3 channel would indicate a continuation of the bearish trend, with targets set at the x6 and x9 levels. These levels offer ideal areas for traders looking to add to their positions or initiate new trades in the direction of the overall trend.
• Support Level at x9: If the price were to reach the x9 channel, it could signal an oversold condition, possibly providing a short-term opportunity for counter-trend trades.

Momentum Shift and Reversals

While the current bias is clearly bearish, it’s important to monitor for reversal signals:

• EMA Crossover: A bullish reversal could be signaled if the upper boundary of the Momentum Zone (EMA 8) crosses above the upper boundary of the Value Zone (EMA 50). This would suggest that the selling pressure is weakening, and a new upward move might be forming.
• Daily MACD Flip (15, 25, 8): The Daily MACD remains bearish, confirming the current downward trend. However, a flip of the Daily MACD to bullish could indicate a potential shift in momentum. This would be an early warning that a counter-trend move or consolidation phase may be ahead, leading to caution for traders looking to hold short positions for an extended period.

Entry Signals

For traders looking to enter new positions:

• Sell Signal: With price action below the Momentum and Value Zones and confirmed by the Global Time Bars, the sell signal remains dominant. If the price breaks decisively below the x3 GATS Channel, we anticipate further downside momentum with targets set at x6 and x9 channels.
• Stop-Loss Placement: Utilizing the updated 12x ATR-50 rule, the stop-loss should be placed at 1.0978, just above the EMA 50 and GATS x3 level. This ensures the trade has room to develop while maintaining protection against sudden market reversals.
• Position Sizing: Based on the default risk of 0.05% per trade and the current ATR (50) value of 0.0010, traders can calculate the appropriate position size, ensuring the 12x ATR stop-loss does not increase the risk beyond the predetermined level.

Reversal Watch

While the immediate bias remains bearish, traders should remain vigilant for possible reversals:

• EMA Crossover: As mentioned, a crossover between the EMA 8 and EMA 50 could provide a strong bullish reversal signal.
• MACD Momentum Shift: A bullish flip in the Daily MACD (15, 25, 8) would be a strong confirmation of a potential trend change.

Key Levels to Watch

• Support Levels:
  • x3 Channel Support: 1.0895
  • x6 Channel Target: 1.0840
  • x9 Channel (Oversold): 1.0792
• Resistance Levels:
  • EMA 50 Resistance: 1.0978
  • Momentum Zone Resistance: 1.0930

About the Author

Dr. Glen Brown stands at the forefront of the financial and accounting sectors, with over 25 years of experience in leadership, innovation, and strategic thinking. As the President & CEO of both Global Accountancy Institute, Inc., and Global Financial Engineering, Inc., he merges the worlds of finance, investments, trading, and technology to pioneer cutting-edge multi-asset class proprietary trading systems. His Global Algorithmic Trading Software (GATS) remains at the forefront of algorithmic strategies for all major markets.

Key Contributions:

• Developed the Global Elite Proprietary Trading Program (GEPTP), a comprehensive training platform for finance and proprietary trading.
• Innovated the Global Algorithmic Trading Software (GATS), integrating complex algorithms and risk management tools.

Dr. Brown’s commitment to excellence and continuous learning drives innovation at the intersection of finance, trading, and technology. His philosophy, “We must consume ourselves in order to transform ourselves for our rebirth,” is a testament to his approach to personal and professional growth.

Risk Warning

Trading in financial markets carries a high level of risk and may not be suitable for all investors. It is important to understand that there is a possibility of substantial loss, and trading may result in the loss of more than your initial investment. The analysis provided in this report is based on technical indicators and algorithms, which may not always predict future performance accurately. Investors should be aware of the potential for unforeseen market movements, especially when trading assets like currencies, equities, and commodities. Past performance is not indicative of future results, and it is crucial to have a solid risk management strategy in place before making any trading decisions.