Technical Analysis 1 August: More Strength from Majors
EURUSD, Daily timeframe
Pair in Uptrend
Yet, another bullish day for the euro. The pair advanced another 67 pips and traded around 1.1810 in the late Monday afternoon. What should we look out for. As you remember, we’re looking to go with the trend.
Scenario 1: The pair could continue to soar to new heights. We’re looking at target levels at 1.1900, 1.1950 and 1.2000. It could take some time for price to reach those levels but it’s worth the discipline and patience.
Scenario 2: The nearest support is located at 1.1600. So, if there is an event that shakes up the market, price might drop and test that area. 1.1600 could potentially become a level for doing business (going long), if we see the mandatory bullish rejection from it. The rejection should be on at least the 4-hour time frame. See targets from Scenario 1.
Scenario 3: If the pair closes on a daily timeframe below 1.1600, next stop is the support at 1.1500. If price is going down, we need to observe the levels it might reach. Those levels are potential entry points only if we see price bouncing into bullishness from them.
GBPUSD, Daily timeframe
Pair in Uptrend
The Cable has been advancing aggressively reaching out for higher levels and prices. Bulls are charging, and we’re in an Uptrend. On Monday, we saw the pair gain about 62 pips. Where to now?
Scenario 1: The pound could continue advancing without making a correction. As you can see, we have two consecutive bullish days. Potential targets above include 1.3250, 1.3300 and 1.3350.
Scenario 2: In terms of retests, the immediate level is the Support (once a previous Resistance) located at 1.3050. This could become a suitable place for potential long entries. The trigger would be a bullish positive candle on the longer time-frames (from 4-hour and above). Also a lower level offers better prices for long positions. Of course, we have to consider whether price will go there or not. Daily timeframes are a good indication if the retest will take place.
Scenario 3: Price closing below 1.3050 is an indication that price action will likely go deeper (since it’s back into two major levels). The level to look out for as potential stop (support level) is 1.2800. Now, if price goes as low, we need to see price evidence for going long. A daily candle would be a more conservative approach for a trigger of a long position around 1.2800.
AUDUSD, Daily timeframe
Pair is in an Uptrend
The pair has been ranging on the lower timeframes on Monday. If you take a look at the one-hour timeframe, this will be apparent. Situations like those could be favorable for rangebound trades, but generally when it comes to trend trading, we avoid markets that are consolidating. Good news is that today we have plenty of news to spur action into specific direction.
Scenario 1: We’d be looking to ride the uptrend, so levels to watch out for are the potential targets above. First one is 0.8050, next one is located at 0.8100, and then 0.8150.
Scenario 2: If a retracement takes place, we’re look at 0.7900 as an immediate support and potential level to do business at more favourable prices. We need to see price action movement rejecting the level to join the uptrend. The targets would be the same as the ones mentioned in Scenario 1.
Scenario 3: Importantly, if price closes below 0.7900, next level is the support at 0.7750. The second support is deeper but would still be within the context of the uptrend. So, if we see bullish Daily candle pulling away from 0.7750, this could be a valid signal for a long position. Remember, risk management and you risk reward is key to performance. We use trend trading in combination with them.
Gold (in a wide range)
The precious metal dropped in price. But if you take a look at the Daily timeframe, we do not have a bearish engulfment. So, this could very well be a case of Gold taking a break before continuing on its way up. We’re looking to go with the major movement. So, levels and targets remain unchanged for the time being.
Scenario 1: Within the next few days, we could be looking at more appreciation by gold. Next level which is a potential target and a resistance level at the same time is the area at 1300.36. This could potentially be a suitable spot to capitalize on long positions. As you can see, price has respect the level 3 times before on a daily timeframe before, so we should be cautious of this taking place again.
Scenario 2: Price could briefly retest the immediate support at 1260.10. This could be a potential entry place. Of course, we need the mandatory bullish signal to do so. Target is the one mentioned in Scenario 1.
Scenario 3: If there is news influencing the U.S. dollar to the upside, we could see Gold dropping. We’re looking at retracement back to 1239.41. If price doesn’t stop there and continues to drop, stay out and do not take action.
Wishing you Happy and Successful Trading!
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