Both eurusd and gbpusd at key support

Both eur/usd and gbp/usd have been falling for three days now. Well, actually Euro has been falling for four days, as it rallies sharply on the 24^th of August, but reversed dramatically the same day and started collapsing. 

We saw that 200 sma on 1, 2, 4 and even 8 hour charts could not stop cable from depreciating against the greenback. Yet current price action shows that a reversal by the end of the week (this Friday) is possible. A bullish candle on both 4 and 8 hour charts indicates that the support may have been reached and buying pressure is coming in. Some resistance seen at 1.5450 level. I will be waiting for more signs of buying to start opening a long position myself. 

On the other hand, Euro fell around 500 pips against US dollar since Monday and as I mentioned in my previous post, it hit key support and is slightly rising now. One can spot a bullish candle on 8 hour chart too. It may mean that Friday will see Euro and Pound rising and greenback falling. 

Key fundamental news tomorrow:

GBP Gross Domestic Product at: 08:30 GMT

EUR German Consumer Price Index at: 12:00 GMT

Oil is approaching resistance

Oil (US) has been consolidating and correcting. It is currently running to important intra-day resistance level of 40.50. It coincides with 200 sma on hourly chart and also the high of August 24. There might be a false breakout of the area (very likely) and a reversal back to 38.50 or even the low of the year 37.75. 

As the commodity is in a clear downtrend only short positions should be opened. There are much higher chances to make profitable trades trading in the direction of prevailing move than trying to capture counter trend moves. 

Of course, the lower the security drops the sharper rallies upwards it will produce. I will only consider it buying after I see it fail to make new lows for a prolonged period of time. This would be a sign that the downtrend might be over and the commodity is being accumulated. For the time being such signs are not there and only sell positions should be considered. 

Next levels of resistance if the above mentioned is broken: 41.50, 42.00 and 42.50.

Key fundamental data today is: US Gross Domestic Product and US Core Personal Consumption both to be released at: 12:30 GMT. 

US Oil 1 hour chart

Euro Crashes in Waves Against US Dollar

After a sharp rally upward from strong resistance of 1.1200 level eur/usd reached strong resistance at 1.1700 and reversed dramatically dropping close to 400 pips in the last three days. The next logical level of support is surely 1.1200 level. According to definition of classical technical analysis previous resistance becomes support. So, if 1.1200 level was resistance, it should act now as support. There are around 130 pips to go till the target. It will be probably reached by the end of the week, possibly even tomorrow. 

Key fundamental data that might influence the moves in the pair:

Thursday: USD Gross Domestic Product Price Index at 12:30 GMT.

Friday: GBP Gross Domestic Product at 08:30 GMT. 

I do expect price to continue going in waves and a rally is expected at current level: 1.1322. Intra-day support is at an even number of 1.1300. Intra-day resistance is at an even number of 1.1400.

As always I will repeat myself by saying that I want to see a reversal pattern at a key level before I start buying or selling. This in most situations will be a candle pattern that develops on an hourly or 15 minute chart.

The pair is going down in waves

200 sma acts as support in Pound US dollar pair

200 sma on the hourly chart of gbp/usd again acts as support. You can clearly see from example below that since the 18^th of August, price turned around and went up after it had hit the indicator. This indicates that there is bullish bias in the pair and buying pressure may resume the fourth time too. Of course, this time price is below our key level of 1.5700 and there is no guarantee that the uptrend in cable will continue, but if I see any signs of reversal I will surely buy Pound. 

On the other hand, the top on the pair may have been reached and it will head to 1.5400 or even to 1.5200 area. Key fundamental data that might impact price direction is to be released at 12:30 GMT and that will be US retail sales. A more positive than expected number can sink British Pound. On the other hand, worse than expected data will put pressure on US dollar and it will fall. I am slightly bullish at this point, but that can change any time. Anyway, let’s wait for US session to see what number we get with US retail sales. 

200 sma on hourly acts as support

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