Premium Daily Technical Analysis
Cable finally broke out of the descending channel pattern we see on intra-day charts. There were no developments or news from UK economy or around Brexit. The pair was driven by US Dollar weakness. I expect the uptrend to continue. If we see a follow through in the coming day, we can clearly say that the short-term bottom is in place.
I entered half of my long position at 0.7855, on the break of the 20 days moving average. I expect Aussie to find some buyers from the current levels and push up towards 0.8050 resistance. AUDUSD has been in a major downtrend for the last 2 months and it is due a correction. My stop lies at 0.7755 (100 pips). 1% of equity at risk (half lot) Fingers crossed!
So Draghi killed the EURUSD after all. The pair made nice highs at 1.2440 but eventually dropped off when he started to talk about increasing assets purchases when the outlook worsen. Then they lowered inflation forecast for 2019 and added the ECB will be rather “reactive” to the new information. The battle isn’t won yet according to Draghi. All these negative comments pushed EURUSD down a day before NFP and few days before Trump’s tariffs are signed.
Aussie dropped from 20 days moving average after Australian GDP was reported lower, but the pair managed to recover all losses later on. This is a great example of how powerful waiting for the break of 20 MA is. If you entered the market at 20 MA yesterday, you would be gone by now. I always like to wait for a daily close above or below 20 days MA. It had proven by be a very reliable rule over the years.
DXY recorded another down day. The price now closed firmly below 20 days moving average and it is looking weak. This fits the overall bearish outlook on US Dollar. I expect the price to continue lower and eventually high the recent low at 88.50 The price closed below 20 days moving average. This is ready to sell at market. Short lived retracement up is possible. If it happens, 90.10 is a perfect place to sell. The plan is: sell half now and set another half to 90.10. I will skip this trade as I hold the same position in EURUSD. I’m saving my margin to catch Aussie and Cable.
Another half of my short position was closed at break even. Given the facts listed above and the price action, I entered long position at the market @ 1.2335. I believe the last week’s low marked the support I was expecting (20 pips off 1.2130). The price made a key reversal from there and closed above 20 days moving average for the second day in the row. This is very bullish scenario and I’m happy to chance it. Common Trump! Half lot is in at 1.2335, stop loss at 1.2240, targets at the resistance @ 1.2550
This content is for members only