On Friday, I had pointed out about EUR/USD flirting withe the rising trend line support, which was put to test again today and was breached.
Here is the daily chart
At 1.0880, the spot is just a few pips short of 1.0875.
Given the weaker EZ inflation figure, i wont be surprised to see the pair break below 1.0875. Furthermore, the USD side of the story is strong again.
Plus, US stock futures are pointing to positive open and may react extend gains due to China’s rate cut surprise.
Hence, it is more likely to take out 1.0875 and drop to 1.0845-1.08 levels. EUR selling may gain pace as we head near to next week’s ECB meet
Above is the daily chart, which shows the pair is flirting with the trend line support. The upward revision of US Q4 GDP was a surprise and hence resulted in USD strength.
But note down the following
- consumer spending was revised lower
- and an upward revision was mainly due to change in inventory valuation method
Hence, the losses in EUR/USD are largely due to uptick in core PCE and not the GDP. This also means the losses could be undone quickly if the upcoming personal spending number disappoints market expectation.
Cable trapped many, including me, after indicating a bullish break on the charts as it fell to 1.3950 levels.
However, the pair is signalling bullish move again
GBP/USD 15-min chart
Bullish move to +1.40 levels appears likely as
spot remains above 1.3924 and appears to have found support at 1.3960-1.3963 levels. As long as 1.3924 holds, the pair remains a buy in dips.
Booking out of sTerling long mentioned here (https://ogforexwire.wordpress.com/2016/02/26/trade-update-sterling-long-again/) at 1.3970
I shall keep my eyes off cable for now as GBP/JPY cross has gained my attention.
GBP/JPY 15-min chart
The pair has breached rising trend line and is struggling to get back above the same. With Brexit still looming, sterling could take a major hit again if the US data is strong. Yen may remain relatively resilient. Hence, cross appears poisd to test 156.87 levels.
I enter a short 157.45 target 167.87 stop 157.70 (15-min closing basis)
turning out to be a not so good European session for me.
After the first 20-pip profit profit…i have had my two stops blown away in GBP/USD trade.
But I entered a long GU trade again. Trade: Long GU 1.3947 Target 1.3973-1.3990 will place just 20 pip stop.
My rationale for buying on dips is
- Its oversold on 4-hour chart
- And it currently sits above 1.3924, which is a key fibo expansion levels.
Unless it breaks below 1.3924, I would try to go long on dips.
Here is the 15-min chart
The previous decision stopped out. and am into longs now. Looks like its heading to 1.41 levels.
GBP/USD – 15 minute chart
Call it an inverted head and shoulder or rounding bottom, what is important is whether the current 15-minute candle sees a close below neckline.
That would be a strong sell signal. On 5-min chart, the sell signal is already confirmed and I went in with GBP/USD short.
Here is the trade – Sell GU @ 1.4010 target 1.3960 stop @ 1.4030
Booked out of GBP shorts @ 1.3984. Will wait to see if it finds support here and manages to rise back above 1.4006.
If it fails to take out/or fails to near 1.4006 and drops below 1.3985, I would recommend going short again!
Here is my first deal of the day..Short GU @ 1.4005 Target 1.3984-1.3965 Stop loss 1.4120
Spotted a bearish RSI divergence and a failure to stay around key fibo level of 1.4005. That was enough for me to go in
The markets are comatose., equities are pointing to a positive start and oil is most likely heading higher. Looks like we are gonna end the week on a happy note.
GBP/JPY long recommended in the NY session went to its anticipated level. here is the link of the trade https://ogforexwire.wordpress.com/2016/02/25/long-we-go-on-gbpjpy/
As for today, I have my eyes set on following levels in GBP/USD
- 1.3985, 1.4007, 1.4035
- 1.3953, 1.39-1.3902