Technical Analysis 8 September: Dollar is getting beaten up by Majors and Gold
EURUSD, Daily timeframe
On Thursday the pair reached the first target level we discussed at 1.2068. The euro was boosted by Mario Draghi’s positive outlook about the Euro Zone. Question is where to from now on?
The established main trend is a bullish one- this would involve a long-term positive outlook as far as positioning goes. Of course, it has to be remembered that retracements are also a natural part of trends so we have to be aware of those, too. Targets to aim for are 1.2100, 1.2150 and then 1.2200.
The Resistance that we’re currently at 1.2068, if breached by positive price action and if price closes significantly above it, this would then turn into an immediate level of Support for price. So, we could look at that level as an area for potential retracements. As long as price just touches the level and not close below it, the support would be a valid area.
Price could retrace back to 1.1900. If there is negative news coming from the Euro Zone or Germany, this could drag price to retrace even lower. Next support level is 1.1600. From here, if potentially an event drives bullish price action to revert from the level back up and in line with the Uptrend, this would be a valid bullish setup. It is a must that a daily bullish candle occurs.
GBPUSD, Daily timeframe
Bias: Pair in Uptrend
On Thursday, the pair gained about 57 pips and traded around 1.3100 at the end of the American trading session. Now that price is above 1.3050, this level will become a short-term support level for price and potentially at some point the cable could test it (this might happen on some of the lower timeframes, too).
Provided price continues to be drive by strength, the next potential target is located at 1.3300. This might take a couple of days or more for price action to reach. Then, if the cable continues to be supported by fundamentals from the U.K. economy, price could break the level and continue to gain more against the dollar and up into positive direction.
If price stalls at the rejection level at 1.3300, this could lead to a retracement back toward 1.3050 which would then potentially serve as a level of support and maybe could be a place for doing business if price rejects it with a bullish daily formation. Target would then again be 1.3300. This scenario is just a probability but still developments like those have been historically observed and we have to consider possible ones.
In case price closes below 1.3050, then next immediate support is 1.2800. Again, the area 1.2800 could become a spot offering better prices for joining the Uptrend. Wait for a bullish signal on larger timeframes for a valid setup and make sure you do not make assumptions before the market gives you the expected signal.
AUDUSD, Daily Timeframe
Bulls are clearly in charge in this pair. As of Friday, September 08, we’re seeing four days straight of bullish price action. Price is now soaring above the level that was once resistance at 0.8066 and now trades (as of 05:32 a.m. GMT +1) around the 0.8100 level. The developments that we’re observing are the following:
The Australian Dollar continues to advance in northern positive direction with potential targets at 0.8150, 0.8200 and 0.8250. This is a scenario in line with the major price action direction- we’re in an Uptrend so the stronger bias is toward long trades (from proper levels). Also remember that when entering on daily timeframes, would exit levels should be set based on that same timeframe as well.
Price could retrace to the immediate support at 0.8066 for a test. We could recognize a retracement move by the pair regaining its formed directional movement with a bullish rejection on a larger-timeframe such as the daily one. For targets, see Scenario 1.
Deeper retracements could ensue if potentially price reverts and closes below 0.8066 to trace back with the recent range the following levels: 0.8066 and 0.7900. 0.7099 could be a level offering better prices for a long trade. However, if broken, price could go for 0.7750 support level.
The precious metal has been aggressively advancing into positive direction. The bulls have their grips on the metal and now it seems that along with currencies those markets are beating up the U.S. dollar. The following developments are the ones observed:
More strength from Gold could boost further price action into positive territory on Friday. The target we mentioned, 1378.7 is nearby. However, bear in mind that sometimes on Friday, day traders and those who do not like to hold over the weekend might start to close positions. This is of course not a certainty. Next long-term target above is 1400.00
Price could make a retest (within the context of the Bull trend) – the immediate support level is located at 1338.00. This could be a chance at entering the trend from weaker and thus better prices. As long as price rejects the support level at 1338.00 this would show us that the support level is respected and this is simply a retest. If price falls below, stay put and await further price action.
Wishing you happy and successful trading!
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