Same as last week on the daily we have a break out of the descending trend-line, we also see the counter (ascending trendline) which we are currently testing and at the time of writing we have a daily bullish engulfing candle. Targets for longs on this pair will be the previous highs of around 1.34.
Using our fib tool we can see that the last bullish move has retraced to around the 61.8 level and that higher time frame target is also around the second fib extension level.
Finally on H1 we can see the market attempting to break the lower high we formed as part of the pullback. An obvious break and retest of this level and I will be entering long with targets as previously discussed.
Above are the two potential scenarios we could have on EU this week, the first is that this descending trendline will still be valid and this is simply a false break leading to a strong bearish engulfing candle on Tuesday. If this scenario plays out then targets will be at the fib extension as shown above. The second scenario is that this pair continues bullish and breaks out of this trendline. If this occurs I will wait for the retest of the trend line before entering long positions up to the local high as marked by the arrows.
The yellow area marked above is the current bullish move this pair is having. We can see the large momentum behind it as it failed to create even a 38.2 retracement. Due to this I would need strong confirmation before entering shorts at the risk of entering too prematurely.
Price has been moving upwards in the bearish channel as shown but there is a strong level of resistance marked off too. I personally am waiting for another test of the channel support before going long on this pair up to the resistance, if we break through the resistance I will be holding with a trailing stop with potential targets of the highest high shown in the above chart.
On H1 we can see one potential scenario that could play out in order to give us a buy set up once the new high that is currently being formed is broken.
Note: Please be careful trading all GBP pairs this week due to the current Brexit negotiations.
Similar to UJ we can see a very clear ascending triangle being formed.This to me is bullish as each time we tap the ascending trendline we are forming higher lows.I am waiting for another test of the trendline before longing this pair upto the horizontal resistance as shown above.
This pair however still hasn’t formed a valid retracement off of the last bearish move yet and so I believe that it will push upto the yellow box above before a small bearish retracement. Once we break this new high we form I will be entering long with targets at the highs on the daily.