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.
Like I mentioned last week, after 8 bullish weekly candles in EURUSD, first time since 2004, there needs to be a bearish one, and we got one! Next week will be interresting, because we have a bearish weekly setup, even though not as strong and a bullish H1 and H4 setup. So I would say first up and then down…the question is how high and for how long. But long term bears should probably wait until wednesday-thursday for better entries. Targets are still the same, 1600-1650 for EU and 2800 for GU, the question is only where to enter, for minimum drawdown. I expect the week to start bullish and then we will see…
Pound is offering good opportunities for range trading during the past 2 weeks, with the price stuck in a small range, which mostly means that it is preparing for a big move…either up or down. For shorts, we have a clear SL zone above 3600, if it starts dropping, the first big target zone is 2500 and a small one at 2800, which was my initial short target for august. From a technical perspective, its a clear short of GU between 3100-3200, but pound doesn’t always respect technicals, especially not before spiking above or below good entry zones. So it might be a good opportunity to watch and evaluate and look for shorts if it isn’t able to break above 3200. Eventually bulls will get tired, if we stay in the current range, and give up. Then, 2800 would be the first target for bears.
First, I would like to mention something very interresting. EU had 8 bullish weekly candles in a row. Anyone remember the last time this has happened? Most won’t…it was in 2004! Check the chart below.
EU is currently stuck in a range between 1700-1900, so it provides good opportunities to both, bulls and bears. I am inclined towards scalping the spikes between 1800-1900, with a target of 1700-1720. Until 1695 breaks properly, we might be stuck in this range for now. I wouldn’t buy for targets above 1900, because a spike above 1900 might be a bull trap. 2 more weeks left in august, so lets see if we are still stuck in this range by the end of it, or if bears manage to break below. Until then…its scalping time. I highlighted possible target zones on the charts below.