Weekly Trend direction: Bearish
Weekly trend reversal level:1.5050
Key G7 resistance levels: 1.4950/60, 1.5000, 1.5050
Counter-trend opportunities:
Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal.
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Today's trade suggestion:
Another day – another dollar for range traders as the euro has been stuck in the 1.4800-1.5000 range since the beginning of the month. This really could break out eitherway(as it eventually will) but there are signs that the 1.5000/5050 barrier is going to be tough to break. Notice on the hourly chart that we have the makings of a “descending triangle” with lower highs each time the rally to near the range top takes place. We are currently butting up against the downward top of the triangle as I write, and I’ll be watching and waiting for signs of reversal on the hourly chart. Target for short trades is the range bottom around 1.4800 and, on a successful break lower, 1.4650.
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Summary:
Sell rallies to 1.4950/60 or at higher resistance levels, target 1.4800 and then 1.4650
GBP/USD
Weekly Trend direction: Bearish
Weekly trend reversal level 1.6880
Key G7 resistance levels:
1.6600/20, 1.6680, 1.6720
Counter-trend opportunities:
Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal
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Today's trade suggestion:
A big bearish engulfing candle last week means that we are going to look to sell the pound into rallies this week.There is little doubt that the markets are struggling with the levels they are at presently, and this is causing a lot of quite volatile (and often unexpected) intra-day movement. This makes trading tricky and one needs to be patient and wait for the clear setups before leaping into trade positions. Resistance on the pound lies quite some distance above at 1.6600/20 and above, so we’ll have to wait for some decent counter-trend rallies before
selling. Don’t rush this process. It may be tempting to sell with out a clear signal or at lower levels, but this would be a strategic mistake!
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Summary:
Sell rallies to 1.6600/20 (or higher up if this fails) Target 1.6500 and then 1.6250.
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