Resistance level at 0.7000 handle looks pivotal.

My previous signal on 2^nd August was not triggered as there was no bullish price action when the price first reached the support level I had identified at 0.6913.

Today’s AUD/USD Signals

Risk 0.75%

Trades may only be taken prior to 5pm Tokyo time Thursday.

• Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.6999 or 0.7063.
• Put the stop loss 1 pip above the local swing high.
• Adjust the stop loss to break even once the trade is 20 pips in profit.
• Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.

Long Trade Ideas

• Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.6878 or 0.6797.
• Put the stop loss 1 pip below the local swing low.
• Adjust the stop loss to break even once the trade is 20 pips in profit.
• Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.

The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

AUD/USD Analysis

I wrote in my previous forecast on 2^nd August that the AUD/USD currency pair was showing a mixed technical picture: a medium-term symetrical bullish price channel, but choppy and is bearish price action over the short-term.

I thought the best approach would be hoping for the price to continue falling to the support level at 0.6913, and to enter a long trade if there is a firm bullish bounce there.

This did not pay off but it would not have got anyone into trouble either.

The technical picture today is somewhat different. The price chart below shows that the flow of the price has moved from being contained within a bullish price channel into a new bearish price channel. What is especially interesting about this channel is that the upper trend line is quite confluent with a key resistance level which itself is confluent with a major round number at 0.7000. It is clear that a short from a bearish reversal at 0.7000 could be an interesting trade, especially as the price has a lot of room to fall, with no key support until 0.6878 is reached.

The major event of the month these days is the US inflation data due today, it is quite likely the release will trigger a meaningful spike in the price, so scalpers might find some pips fading these spikes at key levels if any set up. I will repeat, a short trade at 0.7000 looks potentially very interesting.

Regarding the USD, there will be a release of US CPI data at 1:30pm London time. There is nothing of high importance scheduled today concerning the AUD.

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The Dow Jones Industrial Average rose slightly during its recent trading at the intraday levels, to achieve slight gains in its last sessions, by 0.09%. It gained about 29.08 points, and settled at the end of trading at the level of 32,832.55, after its rise during Friday’s trading by 0.23%.

Traders were hoping that a strong labor market would defy the latest evidence of a slowing US economy, as the quarterly corporate earnings season draws to a close, which was well-received in the second quarter overall.

But last week’s strong jobs report for the month of July makes it more difficult for investors to think that the Fed will rely on its plans to raise interest rates at its next meeting next month, as Friday’s solid work report indicates that companies have not cut employment distance.

Investors were also weighing the implications of the massive healthcare, climate and tax package passed by the Senate in a party-line vote on Sunday, giving President Joe Biden a political victory. The package is expected to win approval in the Democratic-controlled House of Representatives.

Traders are now waiting for the CPI to be released on Wednesday, with economists expecting an 8.7% YoY increase which will be down from 9.1% in June. The market now needs to see that inflation is going down, or else it will assume that the Fed will remain somewhat aggressive in raising interest rates and stocks will collapse.

Technical Analysis

Technically, the index is rising with the support of its continuous trading above its simple moving average for the previous 50 days, until it reached its last trading to test the ceiling of that bearish corrective price channel that limits its previous trading in the short term, as shown in the attached chart for a (daily) period, with the influx of Negative signs on the RSI indicators, after reaching overbought areas.

Therefore, our expectations suggest a return to the index’s decline during its upcoming trading, as long as the resistance level 33,240 remains intact, to target the support level 31,885.

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Hits new August high above $24k.

Previous BTC/USD Signal

My previous signal on 1^st August was not triggered as there was no bullish price action when the support level I had identified at $24,372 was first reached.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades must be taken prior to 5pm Tokyo time Tuesday.

Long Trade Ideas

• Long entry after a bullish price action reversal on the H1 timeframe following the next touch of $23,585, $23,028, or $22,713.
• Put the stop loss $100 below the local swing low.
• Move the stop loss to break even once the trade is $100 in profit by price.
• Remove 50% of the position as profit when the trade is $100 in profit by price and leave the remainder of the position to ride.

Short Trade Ideas

• Short entry after a bearish price action reversal on the H1 timeframe following the next touch of $24,358 or $25,000.
• Put the stop loss $100 above the local swing high.
• Move the stop loss to break even once the trade is $100 in profit by price.
• Remove 50% of the position as profit when the trade is $100 in profit by price and leave the remainder of the position to ride.

The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

BTC/USD Analysis

I wrote in my previous analysis last Monday that the price of BTC/USD had reached a pivotal point: the support level at $23,266. I thought that if the breakdown happened, it could be quite strong as there were no support levels below until $21,449. However, I was also happy to take a long trade from that level if there was a bullish bounce.

This was an OK call as the price broke down slowly, and this did indicate correctly that the price would fall over the remainder of the day.

The broad technical picture is unchanged: the price continues to rise gently and be held by a wide bullish price channel.

The shorter-term picture has become more bullish as we have seen the price make two clear higher lows since towards the end of last week, and today it has been rising firmly to break out bullishly above the former resistance level at $23,585 and make a new August high price.

The important question now is whether $23,585 will continue to hold as new support. If it does, we could see the price rise today to $24,358 or even the big round number at $25k.

The best approach to trading Bitcoin today will likely be to wait for a long from a bounce at or very close to $23,585. I would not want to see any hourly closes below that level before entering a new long trade.

There is nothing of high importance scheduled today concerning the US Dollar.

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Looking heavy at $22,236.

Previous BTC/USD Signal

My previous signal on 20^th July was not triggered as the reversals took place beyond the key levels which I had identified that day as probable support and resistance.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades may only be entered before 5pm Tokyo time Tuesday.

Long Trade Ideas

• Go long after a bullish price action reversal on the H1 timeframe following the next touch of $23,266 or $21,449.
• Place the stop loss $100 below the local swing low.
• Adjust the stop loss to break even once the trade is $100 in profit by price.
• Take off 50% of the position as profit when the trade is $100 in profit by price and leave the remainder of the position to run.

Short Trade Ideas

• Go short after a bearish price action reversal on the H1 timeframe following the next touch of $24,372 or $25,000.
• Place the stop loss $100 above the local swing high.
• Adjust the stop loss to break even once the trade is $100 in profit by price.
• Take off 50% of the position as profit when the trade is $100 in profit by price and leave the remainder of the position to run.

The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

BTC/USD Analysis

I wrote in my previous analysis on 20^th July that the price of BTC/USD was likely to continue rising due to the strong short-term bullish momentum and lack of any foreseeable risk events. This was an OK call insofar as the price rose over the London session, but eventually ended the day lower.

The Bitcoin rally continued over the past week, reaching a new 6-week high last Thursday, but not by much. The price quickly reversed and has been trading downwards ever since. However, the price still remains within a symmetrical bullish price channel but has fallen from an area near the top of the channel.

The price now seems to have reached a pivotal point: the support level at $23,266. This support has not yet broken down, but the price does look heavy here and we could well see a breakdown today. If the breakdown does happen, it could be quite strong as there are no support levels below until $21,449 so the price has plenty of room to fall. The lower trend line of the bullish price channel is well below that horizontal level and trend line analysis can be very useful for an asset as responsive to technical analysis as Bitcoin typically is.

I see the best approaches to Bitcoin today as looking for a long trade from a bullish bounce at $23,266, or if that level breaks down, a short trade below it, ideally from a failed retest of the level from below, with the short entry coming after the price bounces bearishly off $23,266. Shorter-term traders might not wait for the retest and instead just try to sell on short-term rallies as they turn bearish.

Concerning the US Dollar, there will be a release of ISM Manufacturing PMI data at 3pm London time.

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I will be looking for this market to show signs of a bounce, and then will get long again.

The USD/JPY pair initially rallied Wednesday but gave back gains to show signs of hesitation. That being said, we are still very much in the same up-trending channel that we have been in for a while, and I think we have a scenario where the market will give us plenty of opportunities occasionally. The market dipping gives us an opportunity to pick out the US dollar against the Japanese yen which is the epitome of central-bank divergence at the moment.

It’s worth noting the 50 Day EMA sits below near the ¥133.50 level and is rising to meet the bottom of the up trending channel. This could end up being a buying opportunity, but we will have to wait and see whether or not the buyers return. I would be very cautious, but it is worth noting that the interest rate differential between the United States and Japan continues to widen, as the Federal Reserve raised interest rate 75 basis points. I think given enough time, this is a market that will take off to the upside and not look into the ¥140 level.

On the downside, if we were to break through the bottom of the up trending channel, we could test the 50 day EMA, which is an area that I think is worth paying close attention to as a lot of traders like that as a dynamic support level. Because of this, that could be where the market pulls back to before the buyers combine, and even after that, we have the possibility of a move down to the ¥128 level. That’s an area that I think would see a lot of interest as we had bounced from there previously. Anything below there then changes the trend.

As things stand right now, it’s likely to remain a “buy on the dip” market, just as we have seen over the last several months. Until something changes fundamentally from either central bank, I believe that is difficult to get short of this market, and you have to follow the trend. Trends like this don’t and overnight, so I would anticipate plenty of momentum still be a major part of what we are seeing here. Because of this, I will be looking for this market to show signs of a bounce, and then will get long again.

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The price is looking likely to consolidate over the near term.

My last GBP/USD signal on 4^th July was not triggered, as the bearish price action did not take place at any of my identified key resistance levels.

Today’s GBP/USD Signals

Risk 0.75%.

Trades may only be entered before 5pm London time today.

• Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of $1.1934 or $1.1912.
• Put the stop loss 1 pip below the local swing low.
• Adjust the stop loss to break even once the trade is 25 pips in profit.
• Take off 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to run.

Short Trade Ideas

• Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of the descending trend line shown within the price chart below or $1.2097.
• Put the stop loss 1 pip above the local swing high.
• Adjust the stop loss to break even once the trade is 25 pips in profit.
• Take off 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to run.

The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

GBP/USD Analysis

I wrote in my last forecast on 4^th July that the overall picture looked bearish, so it made sense for swing traders to wait for retracements to resistance levels and look to take short trades there at price reversals.

I was correct to look to the short direction, as the day’s major move was downwards, but the turn did not take place at any of my resistance levels.

The price is considerably lower now, but the technical picture is conflicted. The price chart below shows that the movement of the past few days and arguably longer is held by a bearish price channel. However, we have strong support near $1.1900 and a firm higher low near there. Yet whenever the price gets near the top of the channel, it sells off strongly. This suggests that the bears have the upper hand, but strong buyers are still stepping in. We have seen bullish reversals in both the EUR/USD and the GBP/USD currency pair which put the continuation of the strong long-term bearish trends into question.

We have seen major political developments in the UK in recent days with the resignation of Prime Minister Johnson, but they seem to be having little effect upon the Pound.

There is not a lot of room between likely support and resistance, so I think the best approach today will be to try to scalp in either direction after the London open from either support or resistance, whichever is hit first, and monitor the reversal trade on a short time frame and hope for a breakout. Be careful and conservative with profits and be ready to exit, because price movement could be limited and choppy.

Concerning the GBP, the Governor of the Bank of England will be testifying on the stability report before parliament at 3:15pm London time. There is nothing of high importance scheduled today regarding the USD.

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The greenback has pulled back just a bit against the Canadian dollar during the Juneteenth holiday, as the market has dipped below the 1.30 level. We are at the top of a major trending channel, so it does make quite a bit of sense that we would see noise in this area. Because of this, the market looks as if it could get a little bit of breakdown from here, assuming that the overall range sticks.

If we were to turn around to break above the 1.31 handle, then it’s very likely that the US dollar will continue to go higher, but right now it certainly looks as if a pullback is more likely than not. That being said, it’s probably worth noting that as time has gone on, we have seen plenty of buyers on dips, and it’s worth noting that the overall trajectory of the market has been higher over the long term. I don’t think that changes anytime soon, but the attitude of this market is one that has been rather steady, which makes sense considering that the two economies are so heavily intertwined.

At this juncture, if we do pull back from here, then I think the 1.29 level is an area that you have to pay close attention to because it should be crucial. If we do break down below there, then it’s likely that we fulfill the back-and-forth that we have seen for some time, and therefore I would not be surprised at all to see this market go to the 1.27 level, followed by the uptrend line underneath, currently sitting at the 1.2550 region.

As soon as we break out of this channel, then we can start to make bigger decisions, but right now the channel has been extraordinarily reliable, so there’s no reason to fight the thought process. If we break to the upside, we would need to clear the 1.31 handle and close above there on a daily candlestick for me to start buying. At that point, it’s very likely that the market continues in more of a “buy-and-hold” manner. That being said, the fact that we did pull back on a rather quiet day does make sense, as there was nothing to drive the markets in general. While there is an oil component to this care, the reality is that the market will do whatever it wants to do.

All the gains of the GBP/USD currency pair collapsed since trading last week during yesterday’s session. It was exposed to selling operations that pushed it towards the support level 1.2458 after the recent rebound gains, it reached the resistance level of 1.2666, and settled around the 1.2491 level at the time of writing the analysis. The selling operations came as investors returned to buying the US dollar as a haven, in addition to the stronger expectations of the future of raising US interest rates. We are also preparing for the announcement of US jobs numbers today and tomorrow, which may constitute the future of the closing week’s trading for the currency pair.

The British Pound has become the subject of increasingly bearish and extensive press coverage in recent days following a number of suggestions from within the analyst community that it may be on the cusp of a major downward move. But much about the emerging narrative only reflects a repetition of long-standing, polluted views of Brexit, which have gained little market momentum since the end of December 2020 for the Brexit transition period, giving renewed importance to the following October 2021 note.

Meanwhile, the new elements reported in the Sterling trial are couched deeply within the questionable idea that the UK is somewhat of an exception to the European economic trend toward high inflation and a low growth environment that is partly the result of Russia’s invasion of Ukraine. There are also inadvertently self-defeating suggestions of a “connectivity problem” at the BoE as well as allegations that the BoE may struggle to keep pace with peers as interest rates rise in order to rein in hyperinflation over the coming months.

Inflation continues to rise and reached 5.2% in May, while first-quarter GDP was revised down.

According to the technical analysis of the pair: the recent move threatens the future of the bullish channel for the GBP/USD currency pair, which was formed recently. The bears’ control will increase again if the currency pair moves towards the support levels 1.2440 and 1.2360, respectively. As I mentioned before, the breach of the 1.3000 psychological resistance will remain of great importance to break the current bearish outlook for the currency pair.

Amid the British holiday today, the GBP/USD pair will all focus on the US ADP economic data for the change in non-farm employment, weekly jobless claims, non-farm productivity rate and US factory orders.

GBP/USD made a solid rebound from the depths of its mid-month lows, but it may struggle for more momentum over the coming days. Major US economic reports capture the lion’s share of market attention in a period that will be quiet for them from UK economic calendar. The rebound gains for the GBP/USD pair stopped around the 1.2666 resistance level and settled around the 1.2650 level at the time of writing the analysis.

Last week, the British pound benefited from a broad decline in the US dollar, which kept the GBP/USD losses flat and short-lived even after the S&P Global Purchasing Managers Index surveys for May warned of tough times ahead for Britain’s most important services sector. Sterling’s recovery against the dollar was underpinned by the Treasury’s unveiling of a fiscal support package aimed at protecting retired families, the unemployed and other social welfare claimants from very high energy costs.

Since much of this targets welfare claimants for “tested means,” it is possible, if not likely that eligibility issues will also result in the exclusion or simply the exclusion of many low-income workers from such support, which could lead to continued risks to the economy and the pound later this year.

These will be headwinds over the medium term, while other factors are likely to dominate the GBP/USD rate this week.

It is not clear whether US factors such as declining market expectations for US interest rates and other recent international drivers, such as the increasingly broad easing of coronavirus containment measures in China, will remain supportive of the British pound and other currencies over the coming days.

Lee Hardman, currency strategist at MUFG, warns that the dollar could be weak for another corrective setback. The US dollar fell last week amid indications that large parts of the Chinese economy may be emerging from a hibernation caused by the Corona virus, and after some US economic data, including figures related to the service sector, housing market and business investment figures indicated the weakness of the economy.

The US data has encouraged speculation about a possible slowdown in the pace at which the Fed is likely to raise interest rates later this year, speculation that was substantiated to some extent by the minutes of the bank’s May meeting. The minutes suggested that some Fed policymakers might be open to the idea of ​​a pause in the “tightening cycle” if they receive “clear and convincing evidence” that US inflation is falling back to the Bank’s 2% target.

US inflation data is still a bit far from providing the “clear and convincing evidence” that is a prerequisite for any Fed decision to slow or pause the monetary tightening cycle, although that hasn’t stopped the market from pulling back a bit. about US interest rate expectations. The core PCE price index for April provided an additional indication last Friday that inflation pressures may ease, and this is the context in which the market is likely to assess this week’s US economic figures.

According to the technical analysis of the pair: There is no change in my technical view of the currency pair. On the daily chart below, the price of the GBP/USD currency pair started forming an ascending channel opposite to the broader bearish channel. As mentioned before, the breach of the 1.3000 psychological resistance will be important for a stronger and continuous control for bulls on trend. The current trend will continue to face a threat if the currency pair returns to the vicinity of the support levels 1.2490 and 1.2350, respectively.

I still prefer to sell the currency pair from every bullish level as the factors of the strength of the US dollar are continuing and may remain for a long time.

At this point, I think you need to pay close attention to momentum and other indices as they all tend to move in the same direction over the longer term.

The German DAX index pulled back a bit Tuesday after initially trying to rally. The Tuesday session in the DAX has initially tried to break above the 50-day EMA but struggled to continue. At this point, the market is likely to continue to see a lot of back-and-forth action, but as we are at the top of the bearish channel, it’s likely that we would see sellers continue to cause issues.

It’s worth noting that the €14,000 level has offered a bit of support, and if we can break down below there, it’s likely that we would go looking to the €13,750 level next, possibly even the €13,000 level over the longer term. Keep in mind that the DAX is highly sensitive to the overall outlook for the European Union, and it is worth noting that something is less than rosy at this point. The ECB is talking about tightening, so it does make sense that we will see equities on the continent suffer.

If we break down below the bottom of the candlestick for the trading session on Tuesday, it’s likely that we will see a move to the downside. On the other hand, if we were to break above the €14,250 level, then it’s possible that the DAX may recover, perhaps reaching toward the 200-day EMA which is at the €14,750 level. Regardless, I think the one thing you can probably count on is a lot of volatility, so you need to be cautious with your position size. I think we are going to continue to have to pay close attention to statements coming out of the ECB, because if they start to sound more and more hawkish, then that will put more downward pressure on the DAX.

At this point, I think you need to pay close attention to momentum and other indices as they all tend to move in the same direction over the longer term. If other indices around the world start to fall, that will drag the DAX right along with it. The market has been grinding lower since the beginning of April, and it’s possible that we will continue to see a lot of this through the summer as the world tries to figure out supply chain issues, and of course inflation.