Technical Analysis 13 September: Cable reached 1.3300 target on Wednesday
EURUSD, Daily timeframe
The euro dollar has had a couple of days where price action is somewhat fuzzy and undefined. We’re looking for spots and setups to go long with the trend. Other potential scenarios and levels are considered as well.
Currently, price is moving away from 1.1900 but bear in mind that this level could be tested again. Price could temporarily start ranging between 1.1900 and 1.2067. The area within this range is not conductive to opening new trades. We need clarity (which is outside of the range).
This is our scenario in line with the uptrend upon a second retest of 1.1900 support area. A strong rejection would be considered a bullish daily candle of about 80- 100 pips. This potential movement away from the 1.1900 area must be in a combination of price breaking out and closing above 1.2067 for us to have a trend continuation. Targets above are 1.2100, 1.2150 and 1.2200.
Price could make a deeper retest and drop as low as 1.1600. If there is no bullish rejection from this support area and price closes below it, then further weakness could drive price toward 1.1550 area. Await further price action.
GBPUSD, Daily timeframe
Bias: Pair in Uptrend
On Tuesday, the pair gained some serious pips in direction of the trend. The be specific, about 130 pips early today around 05:00 a.m. GMT +1, the pair reached the target at 1.3300 that we’ve been discussing in previous posts. So, where to from now?
In continuation of the uptrend, if the bulls continue to charge north in the same manner, we could be looking at the following targets 1.3350, 1.3400 and 1.3450.
If price retreats from 1.3300 on a daily timeframe, this could mean that the pair has met a temporary level of resistance and may start to retrace. The immediate support level is located at 1.3050. This level could offer a spot with better prices for joining the uptrending movement. For a valid long setup, we would need to see a bullish rejection candle on the daily timeframe to push away from 1.3050. The combination is a must.
Price could start lingering around 1.3300 level and move sideways for a while. This could be only temporary until a news catalyst kicks in and price reacts accordingly.
AUDUSD, Daily Timeframe
Price has been moving about the Resistance level at 0.8066 and for the time being movement is constricted between 0.8066 and the support level at 0.7900. There are a couple of potential levels that we’re looking at for doing business on the long side.
If price breaks above 0.8066 and closes the day above that level, then the area could turn into an immediate level of support for the pair. Even some of the lower timeframes (such as the 4-hour) could make the retest). This scenario is in continuation of the uptrend. Potential targets above are 0.8100, 0.8150 and 0.8200.
The pair could retrace toward the lower band of the range around 0.7900. This could become a level for going long. A significant 80 to 100 pip bullish movement away from 0.7900 could become a signal for joining the Uptrend from better prices. See targets in the above scenario.
If there is an unexpected event affecting the Australian dollar negatively and price just smashes through support levels with no signs of recovery on the larger daily timeframe, then price could drop to test the strong support level at 0.7750 (see chart and the arrows showing where price previously respected the level).
On Tuesday, the precious metal made an attempt to recover. We’ll need a day or two for confirmation if the market has resumed its uptrending movement. Better await for price action as we need more clarity for better positioning. Based on the long-term strategy to ride the established trend, we’d be looking for suitable places to go long.
A level we’re observing to go with the trend would potentially occur if price breaks above 1338.00 Resistance level and closes for the day in positive territory. This would be in line with the uptrend, and price could continue to gain further toward 1400.00.
Price could retrace toward the strong support level at 1300.36. This could offer opportunities only if and provided a bullish candle formation occurs rejecting the 1300.36 level. See targets above.
Wishing you happy and successful trading!
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