Next week we have the US election on tuesday and FED on thursday, so the volatility should be good for both bulls and bears, with moves in both directions, most probably. When looking at the EU chart, it looks very bearish, as we predicted last week, BUT when I look at the hourly setup, I see a lot of hidden bullishness. Thats why I do not plan to short this move any further, for now. I see 2 options…either this move really is bearish and we could short the correction towards 1750-1770 or this move will start a bull into 1830+, possibly 1920. Either way, bulls should be safe early in the week. And a SL area is clearly visible on the chart, too. Interresting things are happening with GU now during the weekend, with the weekend price being 80 pips lower than the friday’s closing price. BUT it is yet to see if the market opens with a gap this big or if the price goes back to the closing levels before market opens. This weekend pricing is not very reliable, especially on saturdays, so it will be interresting to follow what happens. If no gap, GU should go above 3100, as the 2900 area is creating strong support zones and unless 2850 is broken safely, 3100 and higher seems unevitable. I expect some positive brexit news, too, so I prefer to buy the dips, until the deal if final. Then we might see the “buy the rumor, sell the fact” scenario. Right now, everyone seems to be shorting GU..once a brexit deal is final, retail will most definitely start buying the pound and thats when I would like to start selling. But first, lets see if the gap really develops and if it does, if the market can close it on monday.

I will start my analysis with GU, since I am not going to trade it this week, unless I see a clear direction. My target from 4 weeks ago(analysis from september 26) was hit to the pip this week, as seen on the chart below.

But friday’s PA was very misleading, I don’t like it a bit. EU was going strongly up all day, GU down all day…so one of those pairs was “wrong” and I hate to trade GU unless I see something clear on the chart…and now I see both options as possible, 3300 and also 2700. And since we are in the middle, there is nothing to trade for me, at least nothing medium term or long term, scalping might be fine, we will see during the week. EG looks better when it comes to risk to reward ratio…long term we should be heading towards 8500 or less. And every positive brexit news will spike GU up and take EG down…and like I said many weeks ago, the deal is almost a 100% certainty and now its clear to everyone, it seems. So not expecting many negative news, when it comes to brexit, anymore. But I still wouldn’t long GU at these numbers, so just waiting for something more clear on the chart.

This week will be mainly about EU and its “evil twin” UCHF, as we have the ECB conference coming up on thursday. I think all week will be about waiting for the perfect short. It might start dropping right away, from the current 1860-80 area or it might go up before ECB, above 1900 and drop from 1950-2000, we have to wait and see. Traders with good money management should be fine either way. On the H1 chart, we have a clear decision zone between 1800 and 1820, if bulls can protect this one, they will probably take it higher from there, before ECB. If bears take it below 1800 and manage to stay there safely, we should be heading lower. My medium term target is 1637 and a minimum target is 1710. So the only question is if we go higher first or if the week starts bearish right away.

And don’t forget, next week is the last week of the month, so it might be tricky and misleading, with all the news coming up at the same time.

Looking at the weekly chart, EU looks very bearish…BUT I see some risks with shorting it, just yet. Majority of retail is short, 60% of them, plus the H1 and H4 chart show a big bottoming…so a spike up is more likely at this point. The last week of october, during ECB, EU is more likely to drop. The good thing is, bulls have clear accumulation zones on the chart, which are good for a safe SL. And we are close to those areas, so the risk to reward ratio looks good, if we target 1790 on EU and 3020 on GU. Beyond that, we will see…I wouldn’t be surprised if we broke above 1830 on EU and 3070 on GU this week and didn’t give bears a chance until next week. But its better to take it step by step and look for short opportunities if we, indeed, go as high or higher. My first target for EU this week is 1750 and then we will see, if there is power to go towards 1790, might be hard, might be very easy, as price action is changing from one week to another very often and strong bear can easily become strong bull and the opposite.

I see 2 trades for early next week that look almost too good(easy) to be true, so I am curious if they work-out on monday or tuesday at latest. The spike EURUSD did on friday almost certantly needs a correction and same goes for the drop on USDCHF. These pairs are negatively correlated, anyway, so either both work out or none of them will. Not to be greedy, I would only wait for 50-70 pips on each. As for EU, I expect 1760-80 to be re-visited next week and 9150-70 for USDCHF. After these targets are hit, I will look for new setups.

Last week we had the dollar correction as planned and it may well continue this week still. At least early in the week, I wouldn’t buy the dollar, so more up for EU and GU then. As for EU, both targets from last week were hit, now I have a small bull target for early in the week and thats it, no plans beyond that. I am still waiting for a short opportunity above 1900, but if it doesn’t come, it doesn’t come. I see some unfinished business there, so I won’t be shorting until that area is re-visited, even though I am bearish on EU medium to long term.

When it comes to EG, the drop also did continue and we are slowly going towards my target of 8920. It may be a bumpy road until then, but we will get there eventually. I have an idea, but it might not go so nicely, so just shorting the spikes until the target is hit.

GU long from last week worked out the best so far, we are up 200 pips and slowed down between 2900-2950, as I expected. Now I think we will break 3000 and spike above, but it may go the other way first, we will see. Either way, my target of 3170-3240 is still valid. The moves will depend on brexit news and if a deal is realistic or not. Like I said already few weeks back, to me a deal is a sure thing, since big money is involved, but lets wait and see.

I am also seing some interresting long opportunities on UJ. You can see 2 entry zones on the chart, where it might be good to start building longs towards a target of 106 minimum, up to 107. But no need to long yet, safer to wait on how the week evolves and then maybe we will slow down in one of the areas below, for a good long entry.

All targets from the august forecast have been hit, you can see it HERE. But now, when everyone is an EU and GU bear, its time to look for a correction upwards, to take “them” out, before another downmove. On EU I am looking at 1685 and 1750 as possible bull targets and on GU 2900-2950. EU’s upmove will be probably more limited than GU’s, for every pip EU makes upwards, I expect GU to make double of that…since EG turned bearish and should drop back towards 9000 and below. Long term EG can drop even towards 8800, 8500 or lower, so GU longs should be a better choice over EU longs currently. If you check the weekly chart…GU is at an important level, which was resistance before and now turned support. It can drop further, but even if, I expect it to spike above 2900 afterwards. Lets see what London decides on monday, because GU can turn from a strong bear to a strong bull, or the opposite, very easily, we have seen it in the past. Last week, London went full bear right away…this week might be the opposite, we will see. If we go up, I expect the price to slow down between 2900-2950, or below 3000…and after some consolidation break above 3000 in october.

GBPUSD corrected this week, as expected, but had big problems at 3000, which seems to be a huge resistance zone for now. It might be a decision zone for next week…if bulls can break and stay above, the next target will be 3140-3190, if they fail to break above, bears might take over and re-visit below 2800. Weekly candle is mini bullish, so lets see if it helps bulls to break above 3000. For this reason, I am “scared” to short EURUSD just yet…as if GU goes up, EU will go up, too, most probably. I am still waiting for 1930-1950 on EU to be re-visited, to look for possible weakness there. If it goes higher, the double top at 2000 might be a good short, if it doesn’t break and close above 2020. Anyway, week should start bullish and then we will see how high it is able to go, to look for possible shorts.

The pound corrected way beyond my expectations, even though my final bear target was 2800 few weeks ago, but didn’t expect it to come so sudden and in such a disbalance with euro. Last week, EURUSD was ranging up and down, ended pretty much where it started and yet, GBPUSD dropped 500 pips, which is rare and should to be “fixed” by the market in the coming weeks. The market simply overreacted to Boris Johnson’s new UK internal market bill which overrides parts of the Brexit deal already agreed upon. Next week, we will see its second reading being discussed in the House of Commons, so lets see if it goes through in its current form or if it will be changed along the way. There seem to be many Tory rebels as it is, so even the vote in the House of Commons is not 100% sure, let alone the next step, which is House of Lords, where conservatives don’t even have a majority. And on top of that, a brexit deal should be done with the EU before year end, anyway, so then this bill wouldn’t matter anyway. Like I said, the market simply overreacted to this “news”, without thinking it through. And when retailers keep selling pound next week, banks will gladly buy it cheap to take them out.

Below is the daily and H4 chart, we can see it broke an uptrend channel on thursday, but failed to make it much lower on friday, week ended with a strong bottoming below 2800, which indicates a bull move on monday, depending on its strength, we can determine further levels. First, bulls need to break above 2860(friday’s double top) and stay there. When that is done, 3030 will be next big level and after that 3150-70 and finally 3240-3320. We have FED on wednesday and BoE on thursday, so enough volume for big moves. Lets see if it goes up and if yes, how high…

EU made a quick fake spike above 1.20 early this week, which made many retailers bullish and buying every dip, which is no surprise, as they are mostly wrong, anyway. Reality is, EU is still stuck in the same range and with ECB coming on thursday, it might be stuck there until then. For less experienced traders its better to stay out of the market until wednesday-thursday, because the market may make a lot of fake moves both ways until then. Its more likely to break to the downside, below 1800 than above 2000, this week. But like I said, if you are not confident about either side, just stay out early in the week, to avoid being trapped in a bad trade for 3 days or even longer.

For me, dollar is bottoming and I am expecting a spike up, but thats just me, there are still a lot of retail dollar bears, who are only seing the short side. As for numbers, I am not going to predict any, simply because its an ECB week and it would be pointless, I will take whatever the market gives me until the conference or beyond. What I CAN predict for this week is a lot of whining and moaning from retailers on forums, opening trades too soon and then complaining about market manipulation. My analysis is below, take it with a grain of salt.

Nothing new on the EURUSD front, still in the same range, so I’ll focus more on the pound in this analysis. GU looks strongly bullish and many retailers are looking for longs into next week, from what I have read, so its good to look into the other direction. Monday is the last day of the month and tuesday the first day of september, so a correction might start early this week. Trading volume should go up in september, with banks coming back from “vacation”, so its the perfect time for good corrections(or reversals?).

Monday’s asian session will show if bulls want to continue upwards or not and if not, Frankfurt might be a second chance for bulls to do a spike up, between 8am and 9am central European time, before London opens. So if there is going to be a spike up before the correction starts, I would bet on Frankfurt, as they usually do this on mondays. IF NOT, that will mean the bulls are weak and bears will probably take over early and can target even 1.30 again in september. My bear target is 3150 only and from then on we will see what happens.

Chart is clear to me, the upper range should hold or in case of a spike up, it should be only short-term.