EUR/USD daily trading thought using RSI and moving average
RSI is an oscillator indicator to help traders know of an overbought or oversold market condition while Moving average is a trend following indicator for helping traders to know whether the market has gained support or resistance.
On Wednesday 18th December of 2019, the EUR/USD market has been downtrending most of the time thus some few traders has been profiting from the trend while majority of the traders have been affected by this downward trend .The EUR/USD market has managed to go as low as 1.1110. This downwards market movement is being indicated as from the candlesticks chart below;
From the EUR/USD candlesticks chart market above, there are two points, point A and point B. Point A being located along the RSI while point B being located along the moving average. As you can see from above, the EUR/USD market has been bearish most of the time .We are not sure whether the market will start a bullish trend but with RSI and moving average indicator, we can be able to predict the direction of EUR/USD market for the remaining time as follows;
CONCEPT of RSI
Using RSI concept,the market is considered to be in overbought condition when RSI rises above 70 and to be in oversold condition when RSI falls below 30. At point A,the RSI has fallen below 30 thus and indication of an oversold market condition. At that point,the price is at 1.1110. As a trader, we will follow the RSI concept and open a buy position over there at a price of 1.1070.
CONCEPT of Moving average
Using the Moving average concept,the market is considered to gain a resistance point if the price rises above the highest point of moving average and to be in support point if the price falls below the lowest point of moving average. At point B,the price has fallen below the lowest point of Moving average at 1.1110 .As a trader,we will follow the Moving average concept and opens a buy position at a price of 1.1070. Our trading ideas strategies for today for EUR/USD pair is as follows;
buy 1.1110 T/P 1.1160 S/L 1.1050
This is not an investment advice,it is only a trading idea. Always make sure to apply risk management while opening your position.