Hello Forex Traders!
As August progresses the Forex market seems to be turning into a slow grind. The USD attempted to strengthen but the currency found (slight) rejections against most other currencies. The lack of market participants and the subsequent thin trading might still last another week before trading picks up towards the end of August. Until then many Forex traders could be enjoying the beach and sea instead of their usual charts so be careful with trading. At minimum avoid over trading and be realistic about the take profit level you are aiming at.
With market conditions as described above, today we will again focus on the potential intra-day trading potential. In markets like these it can never hurt to open and close the trade within a trading session and day.
Before we continue, I wanted to let you know that Nathan’s video analysis is available so make sure to check it out!
In our last article we wrote that the best intra-day trade for the GBPUSD were longs upon the break of the trend line and above R1 at 1.5496 up to the R2 at 1.5546 or shorts below S1 down to S2.
That is exactly how the price action unfolded, so congratulations on those pips if you took the trade! The GU stopped to the pip at 1.5546, making a great 45 – 50 pip run to the upside.
For today, the best trade to the upside seems to be upon the break of the 1.5574 top. We will sum up the reasons for that here:
1.) The GBPUSD confirmed its uptrend by posting a higher low and higher high on the 4 hour chart.
2.) The GU moved down very correctively and broke the top of that correction, which now proved to be bull flag, was broken.
3.) The break of the bull flag was accompanied with sustainable price action as the 4 hour candle closed well above the trend line and the candle close was near the high.
4.) Despite this bullishness, the currency is currently right below resistance at the major 1.5574 top. Going long right in front of a top is always not recommended. Today it could be more dangerous than usual as it is summer trading.
Taking the above analysis into consideration, the best trading for longs is upon the break of the top at 1.5574 up to the daily 886 Fibonacci retracement level at 1.5640.
Our pivot point indicator is confirming that technical analysis view. The R1 is at 1.5563, the R2 at 1.5617, the H4 breakout at 1.5578 where as the H5 target is at 1.5635.
Shorting the Cable is not something I am interested in considering the impulsive up move yesterday. A break of the support trend line is the bare minimum what I would need to see before even thinking about it.
There is a GBP fundie at 9.30 UK time on retail sales.
The EURUSD is in a tough spot. Here is why:
a) The EU broke the uptrend channel to the downside
b) The EU has done so in what seems to be 5 waves, indicating an impulse
c) Currently the EU made a 3 wave back up
d) In doing so it broke out of the downside channel
The EURUSD has broken both up and down trend channels so caution is advised as the price might move into a range environment.
These are the key levels to keep an eye on:
a) Major level on the 4 hour top at 1.3317. A break of that price level could indicate the resumption of the uptrend.
b) The bottom trend line. A break of that trend line confirms the bearish reversal potential.
c) The daily support level at 1.3190. Although the mentioned trend line break could signal bearish continuation, this does not mean it will be able to break a daily support zone.
Our Pivot Point Indicator is confirming the fact that the potential for longs today might be limited in its movements.
Regarding the downside: it is showing a S1 / L4 confluence at 1.3236-39. The S2 is around the corner at 1.3218 and the S3 at 1.3198, just above the daily support. Not much space on the EU.
There are no major fundies on the Euro, but there is USD news at 8.30am and 10am. Read Tony’s analysis on the German GDP here.
This is my opinion on how to trade the Forex intra-day.
Thanks for reading! Hope you found this intra-day analysis on the EU and GU interesting! Please leave a note down below if you did enjoy it.
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