EURUSD forms a new range.
Borders: below 1.0990.
Top: 1.1097.
We take positions in the direction when breaking through the boundaries of the range.
General background: All the news went by the wayside compared to the coronavirus epidemic in China, which might cause a new Big Crisis which is not less than the 2008-2009 crisis.
How to understand that the crisis is not a correction?
From the trader's point of view, two facts are needed to determine the Big Crisis:
1. One must see clearly the cause of the Great Crisis.
2. You need to see the crisis situation on the chart of the US stock indices.
First point:
For example, right now, the epidemic in China is a clear reason for the crisis (only for the Big Crisis the epidemic should have a huge spread, much more than on February 3). For the 2008-2009 crisis, the clear reason was the big crisis in the US mortgage and real estate markets and the fall of large banks (Lehman Brothers, then Bear Stearns, Morgan Stanley).
Second point:
Assess the crisis on schedule. A) Take a chart of the daily scale (not lower). For a crisis on the stock market, you need at least 3 days of a strong market drop on volumes above the average. (Three days not necessarily in a row, but after the last maximum of the market). This does not mean that three days is exactly a crisis. Three days of a strong fall which is a ban on purchases. If the days of the fall will be 5 or more, this is almost certainly a signal of crisis. You can play the fall if there is a presence of the first point.
For the foreign exchange market:
We do not have honest data on volumes, unfortunately, we will have to consider abnormally large candles on the daily chart for point number 2.
Keep an eye on virus reports in China.
