Emini and Forex Trading Update:
Monday October 28, 2019
I will update again at the end of the day.
Pre-Open market analysis
On Friday, the Emini traded above the September high. Since it reversed up from below the September low early in the month, October is now an outside up bar on the monthly chart. That is bullish.
The Emini will probably make a new all-time high on the day session chart today. If it closes above the September high and the July all-time high, especially far above, the traders will expect it to go up into the end of the year.
Wednesday’s FOMC announcement can lead to a big move up or down. Because of the uncertainty, there is an increased chance that the Emini will be mostly sideways ahead of the report.
Overnight Emini Globex trading
The Emini is up 12 points in the Globex session and currently above the July all-time high. Since June, I have been saying that there would probably be a new high in September or October. With 4 days left in October, the bulls should achieve their goal this month in the day session as well. The Emini might gap to a new high on today’s open.
Because the Emini is testing an important price, there is an increased chance of a trend day. If there is a trend day, up is slightly more likely than down.
EURUSD Forex market trading strategies
The EURUSD daily Forex chart had 4 bear bars in the past 5 days. Since the bear channel is tight, the bulls will likely need a micro double bottom before they can get a 2nd leg up after the strong October rally.
The bears hope that the rally to the bear trend line will fail. Every rally over the past 21 months reversed down and there was then a new low. But this is perhaps the strongest minor reversal up in over a year. Consequently, many bulls will buy this pullback within a week or two. They expect at least a test of the October high and possibly the June high.
Wednesday’s FOMC announcement will create uncertainty in all financial markets. That often results in some neutrality beforehand. For the EURUSD, this 50% pullback to the EMA after last week’s rally is an example.
Overnight EURUSD Forex trading
Last week is a Low 1 bear flag sell signal bar on the EURUSD weekly Forex chart. This week opened just above last week’s low and immediately reversed up without going below last week’s low. The bulls do not want the sell signal to trigger. If it does, it will increase the chance of at least slightly lower prices this week.
The EURUSD 5 minute Forex chart has rallied relentlessly in a tight bull channel for the past 6 hours. However, the rally has only been 30 pips. Today so far is a small inside day. The rally over the past 4 hours has only been 15 pips. That is too small for day traders to trade. Most are waiting for bigger legs up and down.
Since last week’s low is still only 20 pips down, the bears will try to get there today. But with the overnight range small and with the uncertainty caused by the the upcoming FOMC announcement, today will probably remain small. Day traders will look for a few 10 pips scalps.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
The Emini gapped up to a new high on the daily and weekly charts today. After a brief rally on the open, the day entered a tight trading range. The bulls are hoping for a measured move up over the next few weeks.
When there is a gap above major resistance, the Emini often goes sideways for 2 – 3 days. This is more likely because of Wednesday’s FOMC announcement.
The bears want the gap up to fail. If there is a gap down this week, there would be an island top. But with Wednesday’s FOMC news being so important, the Emini will probably not move much beforehand.
See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.
Traders can see the end of the day bar-by-bar price action report by signing up for free at BrooksPriceAction.com. I talk about the detailed S&P Emini futures price action real-time throughout the day in the BrooksPriceAction.com trading room. We offer a 2 day free trial.
Charts use Pacific Standard Time
When I mention time, it is USA Pacific Standard Time (the Emini day session opens at 6:30 am PST, and closes at 1:15 pm PST). You can read background information on the intraday market reports on the Market Update page.