Euro is in a tight range before making a move

As expected eur/usd went down yesterday after ECB chief Mario Draghi started giving a press conference. The move was over 100 pips in over 15 minutes. Impressive! More that type of speeches! Ok, today, if you look at 15 minute chart you will see that the pair is in a very tight range. What does that tell us? That there is going to be a breakout either direction. As we expect the downtrend to continue we are waiting for the low of the range to be broken to enter a short position. Yah, that is a breakout trade and those do not work out that often, but looks like this one will due to the direction and a move up towards the high of the range, which has already occurred during Frankfurt open.

The move will probably occur sometime after London open. On the other hand, we have Non Farm Payrolls (NFP) during US session and as you know these tend to create tremendous volatility across the board. If the move does not materialize by then I will probably remove my short order. On the other hand, smart money can move price down and take profit on the shorts after the release. Anyway, let’s not speculate, but wait for the event and see what happens. 

Price below key 1.5700 in gbpusd again

The awaited break of 1.5700 in gbp/usd happened, but it turned to be false again, at least at the time of writing and price is again below the level. As you may see from the chart price broke above yesterday’s high and then reversed falling back below key level. That is pretty usual price action in currency market. That also confirms the idea how much manipulated it is. You may not believe it, but how can you explain this kind of price action of breakouts and then reversals the next day. That’s banksters playing with traders’ money.

Anyway, if you chose to be in the game you have to know how to play it. Be sure to watch price action which happens right after a breakout occurs. False breaks are “smart money” tricks to get your money out of your pocket into their pockets. 

We have to continue watching price action to see what happens next. Will there be a continuation of a downtrend or price will rally upwards tomorrow? Anything can happen. Support comes at: 1.5680, 1.5650 and 1.5630. I tend to think a reversal may happen around 1.5650, but that will become clearer after Asian session tomorrow as we will head into European session. 

See you tomorrow with the updates. 

Below key level again

British Pound Drops to Support

Despite ending at the upper part of the range gbp/usd dropped to support during early European session. One can clearly see a reversal pattern forming on 15 minute chart 02:45 to 05:15 GMT, and then price collapsing. The drop might be over as the pair is rallying up from support. We need to wait an hour or two to get confirmation whether the drop is really over or will resume itself. 

There are no major Forex news releases scheduled for today, so trading will probably be more technical than fundamentally driven. 

We have two resistance levels ahead if price starts pushing up. The first one is Asian session high at 1.5697, the second one is last Thursday high at: 1.5723.

Support starts at 1.5630. I expect the level to hold, but if it doesn’t the next level will come at 1.5605, which is the low of 20^th of August. 

Current rate of the pair is 1.5610. I will only start buying if I see a reversal pattern around 1.5630 forming.

Another pair, which is a catalyst to this one, is eur/gbp/ Euro is rising against Pound and when it starts dropping we might see more Pound strength in Pound/US dollar pair. 

Support and resistance levels

Intra-day bearish pattern in gbpusd

British Pound shows bullish momentum versus US dollar and the magical number of 1.5700 that has had for around ten times has to be broken any time now. However, if you look at 15 minute chart and the bearish formation that has formed around the above mentioned level shows that there still might be  a dip below Asian session lows before real buying pressure comes back. There is some fundamental data that might impact exchange rate of gbp/usd. We have – Markit Mfg PMI (AUG P) coming at: 13:45 GMT (Expected: 53.8, Prev: 53.8)

In fact, as I am writing the post Asian session low has been broken. We need to wait for signs of a reversal in order to go long (which is what I expect). Do not forget that momentum is still bullish for the week. Lots of breakout traders have been beaten trying to buy a break above 1.5700. At one point they will succeed, but they will have lost too much money on their attempt. Better wait for a dip and buy at support. At least this type of strategy works for me!

Intra-day reversal pattern on gbp/usd 15 minute

Current level of gbp/usd (Asian session low broken)

Price action of eurusd today

I want to look through eur/usd price action today. If you remember the pair was in a bearish mode since last Wednesday and turned around yesterday. It ran up and closed above Tuesday’s high. It means, that today from day trading perspective we had to look for a bullish set up to go long or simply to wait for a dip and a bullish price action afterwards to take a long position. 

Could there be a better option than to look for a dip below Asian session low and a reversal there? I don’t think so! That’s precisely what happened today.  After London open price slipped below Asian session low and at 07:51 GMT price reach its’ low of the day. It then formed a bullish W pattern and rallied upwards. You should have gone long at the close of 08:15 GMT 15 minute candle (at around 1.1125) with a stop loss below the low of the day at 1.1105 and exited either before US session started at 1.1180 level or even number of 1.1200, or you could keep your position still open for a further upward swing that might take you to 1.1400 level by the end of the week (tomorrow). Well, that’s not for sure, but likely. 

See you with the updates on the market price action tomorrow. 

Price action of eur/usd on 15 minute chart