Downtrend in gbpusd May be Over

After falling the whole week, gbp/usd may be turning around this week and go up. If the pair fails to break Friday low, we may wait a few pushes up this week. There are two levels of support down. The first one is Sunday open low which was made in the first 15 minutes on the open and then cable rallied and formed a high of 1.5436, which failed to be broken on Frankfurt open. Pound briefly went below Asian low 1.5399 by one pip before running sharply upwards. We can still expect a retracement to 1.5380 level, which I expect to hold. The next level of support is Friday low: 1.5335. 

Resistance is today’s high (Frankfurt open high) at 1.5437 (200 ema and sma are blocking the way upwards), followed by 1.5490 (same indicators on 30 minute chart) and 1.5508 (the high of 27^th of August). 

There is no key fundamental news today that might affect exchange rate of the pair. Tomorrow will see: GBP Net Consumer Credit, Net Lending Sec. on Dwellings, Mortgage Approvals and most importantly Markit UK PMI Manufacturing SA all coming at 08:30 GMT. 

Key data from United States will be: USD ISM Manufacturing coming at: 14:00 GMT. 

Oil rallies but price stalls on 4 hour chart

Oil has recovered slightly from its most recent slump. On the 24^th of August the commodity hit its low for the year and rallied upwards throughout previous week. You may see three waves up on the chart, which means the security, may be due for a correction or a fall back to previous lows. In any case, the most logical thing to happen now is some consolidation at the level or a topping process and then a move down in waves. 

You may also spot 200 sma and ema on 4 hour chart and price stalling when it hit the indicator. I assume a lot of traders have taken their profits off the table when the price touched the indicators. 

Of course, another rally of 5 bucks is possible. In that case we would see 50 or 51 in US oil. I tend to think we would probably end closer to 50.50, because the level marks previous support of consolidation on the way down. 

Anyway, we need to wait and see how the market performs on Monday and Tuesday to see whether a move up or down is more likely. 

Long term trend: down

Intermediate trend: down

Short term trend: up

eur/usd at key resistance

Finally eur/usd has come to key resistance level of 1.1500. It wasn’t able to break it for a long time and looks like it may happen any time now. The area actually is between 1.1465 (May 15^th high) – 1.1532 (February 3^rd high). 

As you can see from the daily chart below Euro was accumulated from March 12^th when it made the low of 2015 through the rest of the year with key accumulation levels being 1.0600 and 1.0800 levels. 

It is also clear that the pair broke above both 200 sma and ema. It has actually close above 200 sma and this may happen with 200 ema today too. 

1.1498 level was hit today during Asian session and Euro is playing with it at the time of writing. As all major fundamental news has been released a week or two weeks before; we may assume that a new trend in the pair can start. This time it will probably be upwards. If that happens, buying on dips will be the best strategy for day trading. 

If the breakout does not occur today, the highest probability is that it will happen somewhere around Wednesday this week when US Durable Orders data is released. 

See you with the updates later in the day. 

eur/usd daily chart

Dollar bulls break Pound

Dollar bulls have been beating Pound since the start of European session. However, gbp/usd has gone around 100 pips for today and that is close to average daily range for the pair. Another point in favor of a reversal is that the pair has just reached and went a little beyond Friday’s lows. From daily perspective that is an extreme point and a bounce is highly likely. 

One more point in favor of a reversal upwards is the fact that most moves in major currency pairs stall around 16:00 GMT when big market sharks take their profits for the day or even reverse their positions. So, I assume the low for today has been made and now we need to wait for some candle reversal pattern. 

Oh, yes. I almost forgot one more point that supports my idea about gbp/usd turning around and starting rising! It now sits on 200 sma on 1 hour chart. That is a strong argument for closing all shorts and contemplating a long. Let’s wait some 45 minutes to get some confirmation whether big short positions are being closed or not. Next support level is just 5 pips lower at 1.5575. 

British Pound reaches and breaks Friday’s low

American session may see gbp/usd bottoming

After false breakouts in both directions of Asian session and then a collapse during European session gbp/usd pair may be bottoming. This is not for sure yet, but the signs are there.

We do see the pair making lower lows, but each low now is not far from the previous one. There have been a number of bullish pins, but those failed to have a follow through upwards. All in all, we see 4 pushes downwards. There might be another one, but you have to bear in mind that Pound is in a short term uptrend.

If you look at 30 minute Pound chart you will see more support lying ahead. 200 sma and ema are at 1.5610 level, which I expect to hold today. The pair has fallen 67 pips as of now and this might be the end of it. 

Key support (if 1.5610 is broken) is in 1.5587 level (the low of August 14). There is no need to hurry entering longs before clear signal of reversal is made. I do wait for a few bullish pins that do not exceed the low of the day or a W on 15 minute chart. 

4 pushes to the lows on 15 minute chart