With Brexit a big talking point in Economic News, the is chance of further GBP weakening (Good for Exports) and believe we could have Buyers waiting at the 140.00 level, this is an area reach just recently however we have to go back a Year since the last time this area held, Could it do it Again? Some sneeky Seller perhaps waiting in the wings at around the...
Keeping a close watch on the USD as looks like Sellers are still waiting in the area around 0.6700 Depending on News and Economic Data such as Core Durable Goods Orders and what Fed Chair Powell has to say, these orders could get filled and take price down lower.
Time frame: (4 hours and 1 hours)
Date & Time: 22 Aug 2018, 16:15 GMT+9
Starting Balance: 3157.96
Graph Showing entry and exit points
Fundamentally USD is a bit weak because of Trump comment but the effect already seen on the market.
For what has been an area of resistance for quite some time and still holding, an amount of sellers are waiting in this area still, and if the dollar is to stay weakened against the Swiss France then again this zone could still hold and expect another downturn in price.
This week we've got the BOE Gov Carney Speaking along with Average Earnings Index as well as CPI and Retail data coming out, these are really good pieces of data for the GBP and if positive could be a peice of strength to the GBP agains the Swiss Franc, and with Buyers in and around the 1.3100 area, these could be good trades.
Depending on Euro weakness this week, we have data for the Aussie Employment Change and Unemployment Rate, if these are to be negative then we could see the current support holding and the uptrend continuing. The does look to be a lot of buyers place around the that support zone of the 1.5700 area.
With US Core Retail Sales m/m and Retail Sales m/m this week, these could mean some strength for the USD and price could break through the current support, however this looks to be a level where Buyers are waiting for a quick drop to get into the market to go long, perhaps the Euro data for Final CPI y/y may have some effect by mid week.
This week the BOC Gov Poloz spoke with a dovish tone, despite this the market took a bullish stance on CAD leading to some short term strength. The probability of a rate hike in July moved from 90% probability to 55% probability and has left investors disappointed.
Looking at the technical analysis we followed the higher timeframe uptrend leading to our upper...
If we look to the DXY idea we expect USD weakness. The DXY is made up of 58% EURO. Which is why there's a heavy correlation between the Index and the currency pair.
If we expect USD weakness we must expect EURUSD to move higher, price is currently sitting at the key support much like the DXY sitting at the $95.00 resistance level. If price holds at this key level...
As you can see from the weekly chart above there could be a larger timeframe Head & Shoulders in play.
Price is currently rejecting the $95.00 level again this week which could indicate USD losing some of its recent momentum.
If price produces another bearish close on the week we could see USD prices back into the key area of $91.00.
For the head and shoulders...
For the meantime, price looks to be contained within a channel. For the short term we could be looking for a sell trade with a build up of order at around the 0.8850 area. Depending on the Brexit negotiations (with 9 months to go) and a possible BoE interest rate rise in August, GBP could gain some strength and take price in the downtrend for the long term.
Price for the time looks to be contained within a channel, a big build up of orders looks to be at around the 0.88500 a good place for a sell trade. Depending on how the Brexit negotiations and a possible BoE interest rate rise in August, the GBP could be looking to gain strength in the more longer term and taking price down.
Though believing in the long term in a Buy trade at the right price, the market looks to be heading in a downtrend in the short term, for a sell trade within the build up of orders at around the the 1.1700 area.
Potential for build up of orders waiting to enter the market at around the 1.5800 area, the could be a good short position for a long down trend. The is a chance of a quick buy trade at around around the 1.56 lev el, however being cautious this could only be very short term.
A quick potential long position could happen before we expect a retracement back to the downside. Some build up of order at around the the 0.7400 area. Or even wait for price to move up and catch the movement for the downturn.