Trading since the start of August has not been smooth for me. My last month’s technical setup didn’t carry over as smoothly as I would’ve liked it. This is partially due to a few key fundamentals going on right now.
Summary of Events:
- U.S. unemployment claims inched up slightly to 244K higher than the 240K estimate
- Safe haven currencies surge as North Korea responds to Trump’s “fire and fury” by threatening firing missiles at Guam
Aside from these two key events, I continue to make a long entry play on the Euro while shorting the Pound. Both EURUSD and EURGBP appear to be rather bullish in my opinion.
For the EURUSD pair, what I’m looking at is the exhaustion in selling pressure. Notice how each wave of selling is failing to push the price lower and lower. Given that this pair is in an uptrend, I consider the retracement movement is near over and don’t expect any further downside.
I do have two levels of support I’m watching right now. However, my long entry is based on the more recent support line at the 1.1723~ price level.
Similarly, I’m also trading off a similar level on the EURGBP pair. I will post a chart of the GBPUSD pair just below, but the idea is that the Pound is remaining relatively bearish at the moment.
This pair is clearly in an uptrend right now and I just go in to ride the next wave of this uptrend. This is a bit clearer on the daily chart. After stalling for two days, buying pressure has resumed and in just a few hours we will be able to confirm that it is breaking above new highs.
This daily chart shows the stall for two days and now we’re seeing the breakout above the top of the solid candle. I do have a daily level plotted at the 0.91157~ level so I will be monitoring this trade much closely at then.
I guess in a way I’m doubling down on the short position for the Pound as I have also shorted the GBPUSD pair.
This is a combination of how price has reacted to the daily level and also lower hourly level. As you can see, the 1.304~ is no longer holding up anymore as this pair broke through that. Meanwhile, price is no longer held supported at the lower 1.301~ level. The two bullish bars in the past two days have proved to be of little significance is signalling the potential for further buying pressure. In the meantime, I forecast a short trade all the way down to the next daily level.