Trade Example: Trading EURUSD With ECB & Virus Concerns

"The focus of trade examples like these are not to showcase a particular strategy, but rather to show how our commentary and analysis can help you interpret news and fundamental analysis and turn it into profitable trades."
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We’re going to demonstrate how Forex Source subscribers made money trading a sentiment shift involving ECB and Coronavirus Concerns this week…

The move we’re going to be looking at is this one here on EURUSD. So, let’s break this down and see how you could have predicted and caught this move, using our market commentary.

So, firstly we need to understand the context or the baseline surrounding this pair before the move took place…

Inside the Forex Source Terminal on 13 March we released our Tradable Sentiment Shift report that highlighted that the EUR was pressured after the ECB increased their Asset Purchases the day before and also failed to appease markets that the bank has done enough to keep the economy steady in the midst of the Coronavirus.

Then, also in the terminal, inside our dominant currency sentiment theme report for 13 March, we see that the Dollar was well supported due to safe-haven bids as investors rotated their portfolios into cash during the market turmoil caused by Covid-19. Once the baseline was in place the next step is to identify the type of breaking news that would generate the biggest market moving shift…

So, for this we can go back to the terminal again to the 13th to our video commentary section, here we released a video at the start of the European trading session that highlighted that we had a downside bias on the pair and that given the current sentiment at the time traders could have chosen to either enter a trade to the downside at market.

We also highlighted that traders could wait for a pullback back to the 1.12 psychological level and jump in when we get further negative news regarding the Coronavirus’ spread and impact in the Eurozone.

So now all we needed next was the trigger, in other words, the sentiment shift that we identified ahead of time, to actually take place.

So, also in the terminal, later on the 13th of March we released another video update to lookout for a European Commission press conference to announce an economic response towards the Coronavirus.

The measured proposed by the EC failed to appease markets of their concerns and saw extra pressure on the EUR. Looking at the chart, if you jumped in at market with our first video commentary of the day you could have caught an 80 pip move down towards the area of support that we highlighted as a good spot to reduce some risk and bank some pips on the trade.

If you missed the first entry, you could still have had an opportunity to jump in on the trade after the EC press conference and banked the remaining 40 pips move to the 1.11 psychological price level.

The focus of trade examples like these are not to showcase a particular strategy, but rather to show how our commentary and analysis can help you interpret news and fundamental analysis and turn it into profitable trades.

So, if you’re interested in learning more about Forex Source and how our market commentary and analysis can help you, click the menu above and check out Forex Source.

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