Bitcoin is still finding buyers close to $20k.

Previous BTC/USD Signal

My previous signal on 18th August was not triggered as there was no bullish price action when the support levels which I had identified were first reached that day. Unfortunately, the high of the day was just below the nearest resistance level.

Today’s BTC/USD Signals

Risk 0.50% per trade.

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

Long Trade Ideas

• Long entry after a bullish price action reversal on the H1 timeframe following the next touch of $20,754 or $20,381.
• 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 $22,713, $23,163, or $23,609.
• 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 on 18th August that the price of BTC/USD was prone to a bearish reversal, with the resistance level at $23,609 looking attractive for a short trade as it had become likely “role reversal” resistance so would probably be likely to hold if reached. I was also interested in a long trade from the support level at $22,713.

Neither of these opportunities set up, with the high of the day unfortunately just a little below $23,609.

As it happened, during the later Asian session, the price broke down from its medium-term bullish price channel, finding a bottom just above the support level at $20,754.

The price has been consolidating since then above this supportive area, making a weakly bullish pattern of higher lows.

The price has room to rise and seems unwilling to fall further, with no key resistance levels overhead until $22,713.

Traders today might look to buy a bullish breakout above $21,900 / $22k, or alternatively hope for a retracement to the support level at $20,754 and go long following a bullish rejection there.

With today’s Jackson Hole symposium, it feels like we may see a major reversal in the US Dollar and a boost for riskier assets, which suggests upward price movement for Bitcoin.

Concerning the US Dollar, there will be a release of Preliminary GDP at 1:30pm London time, followed later by the start of the Jackson Hole symposium and Fed Chair Powell’s speech.

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The pair will likely remain in this range as traders wait for the upcoming US consumer and producer inflation data.

Bearish View

• Sell the EUR/USD pair and set a take-profit at 1.0100.
• Add a stop-loss at 1.0250.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 1.0235 and a take-profit at 1.0300.
• Add a stop-loss at 1.0160.

The EUR/USD price moved sideways during the American and Asian sessions as investors focused on the latest spending package by the Senate. The pair was trading at 1.0188, where it has been in the past few days.

EU Energy Crisis

The EUR/USD pair moved sideways after the American Senate voted for Joe Biden’s climate, tax, and healthcare bill. The bill will provide billions of dollars in funding for clean energy projects like wind and solar.

It will also lower some drug prices by letting Medicare negotiate with manufacturers. Most importantly, the bill will be funded by introducing a 15% minimum tax for companies making over $1 billion in sales every year. Also, it aims to raise billions by introducing a 1% tax on share buybacks.

The pair also moved sideways as more Federal Reserve officials warned that the bank will continue hiking interest rates in a bid to fight inflation. In a statement, Mary Daly warned that the bank will continue hiking interest rates in the coming months.

There is no major economic data scheduled from the United States and Europe on Tuesday. Therefore, investors will focus on the upcoming US inflation data scheduled for Wednesday. Economists expect the data to show that the country’s inflation retreated slightly in July this year as gas prices declined.

Another thing to watch will be the ongoing European energy crisis. Russia has slashed gas supplies to Europe to about 20% of capacity and analysts believe that the situation will worsen towards summer.

The situation will likely get worse as the hotter-than-usual summer continues. In a statement on Monday, Norway’s government warned that it could stop selling electricity to European countries soon. The government said that the country’s hydropower plants were having extremely low levels of water. This could hurt European countries like Germany and Denmark.

EUR/USD Forecast

The four-hour chart shows that the EUR/USD pair has been moving sideways recently. As a result, it is consolidating along the 25-day and 50-day moving averages. It is also between the important support and resistance point at 1.0131 and 1.0276. It is also between the 23.6% and 38.6% Fibonacci Retracement level.

Therefore, the pair will likely remain in this range as traders wait for the upcoming US consumer and producer inflation data. In the near term, however, the pair will likely have a bearish breakout as sellers target parity.

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Volatility is the only thing you can count on, but I do believe that it is more likely than not going to be a situation where selling is going to be easier.

If you ever wanted to fall asleep trading, you can do so by watching the euro. This of course is being said half tongue-in-cheek, but the reality is that we have nowhere to be at the moment. The market continues to hang about between the 1.01 level underneath, and the 1.03 level above. This is a market that is probably better traded from the short term than anything else.

Pay Attention to Support and Resistance

If you are a short-term trader, you can probably go back and forth on a 15 minute chart until we finally break out. Even if we break out, I think at this point you need to pay attention to some areas just above and below the market right now as well. After all, the 1.04 level is massive resistance, as it was previous support. The 50-day EMA sits in the same area as well. On the other hand, if the market were to break down from here, it could open up the possibility of retesting the 1.00 level.

The 1.00 level is obviously an area that a lot of people will pay close attention to, as it has a lot of psychology attached to it. If we were to break down below the parity level, then a lot of money will flow into this market, sending a massive amount of money into this market, especially if we get a daily close below the parity level. At that point, I anticipate that the market could go down to the 0.98 level, possibly even the 0.96 level.

It’s not until we break above the 1.06 level that I would consider that we could have a little bit of momentum, opening up the possibility of the market rally into the 200-day EMA. Ultimately, this is a market that I think is going to be noisier than anything else, especially as the European Union has a major issue when it comes to energy and its economy in general. Quite frankly, I think the euro is in serious trouble, and it is probably only a matter of time before we break down. Volatility is the only thing you can count on, but I do believe that it is more likely than not going to be a situation where selling is going to be easier.

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The USD/ZAR is trading near short term lows as of this writing and speculators need to take a couple of important potential factors into consideration.

The USD/ZAR currency pair is trading near the 1.61100 mark as of this writing, which is near rather intriguing lows. Speculators need to be careful today, because it is a public holiday in South Africa and trading volumes may be lighter than normal. This morning’s early price action did see the USD/ZAR currency pair drop to a depth of nearly 16.57500, which tested support levels seen on Friday before a spike higher was accomplished.

Public Holiday and Perception of a Potentially Oversold USD/ZAR Could be Dangerous

The lack of extensive transactions coming from South Africa today leaves the USD/ZAR open to the possibility of sudden moves today. And when combined with the technical perception the USD/ZAR may have been oversold yesterday and has consolidated near Friday’s support levels is intriguing. However, traders should be careful today, because while the USD/ZAR has the potential of a consolidated Forex market, the currency pair is vulnerable to value gyrations in a lightly traded atmosphere which could be whipsaw like.

Support near the 16.60000 area could prove to be interesting if sustained

Traders should use entry price orders to make sure they are not filled at a surprising ratio which is completely unexpected today.  Speculators should also be aware that a jump from 16.60100 to 16.63000 in a moment’s notice today should be expected, meaning that stop losses and take profit orders should be working, but that fast results could occur and knock traders out of positions with a blink of the eye. However, importantly what traders should also note is that today’s price action may raise false trending flags due to low volume, also meaning tomorrow’s opening for the USD/ZAR could produce fireworks if a move is overdone today and financial houses ‘correct’ the trend.

• Quick range trading may be seen today in the USD/ZAR with light volume; traders should monitor the 16.60000 to 16.64000 ratios.
• If the price range of short term technical support and resistance are broken today, traders need to be prepared for volatility tomorrow when full market action returns to the USD/ZAR.

Ambitious speculators who believe the USD/ZAR has been oversold the past day and that support levels will produce upwards mobility cannot be blamed.  However, because of today’s light trading volume a test of the ‘known’ range may be demonstrated. If a trader wants to buy the USD/ZAR and anticipate a potentially bigger move, they may have to practice patience or be willing to carry a position overnight.

USD/ZAR Short-Term Outlook

Current Resistance: 16.64250

Current Support: 16.59200

High Target: 16.67800

Low Target: 16.55700

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This is a market that I think continues to show negativity, so I like the idea of shorting signs of exhaustion if we get those.

• The AUD/USD currency pair fell significantly Friday as interest rates in America started to spike again.
• The jobs number came out much hotter than anticipated, so people are starting to assume that the Federal Reserve will have to continue to be very tight.
• After all, the Federal Reserve has been trying to tell everybody over the past week that they are nowhere near pivoting, and the US dollar shrinking was a bit of a stretch.

Technical Analysis

At this point, the market is threatening to 0.69 level, which is an area that I think a lot of people pay close attention to. We did pierce that level at one point, but then turned around to rally and break above it. This does not suggest to me that the market is ready to turn around for a bigger move, just that we are struggling a bit at this point. If we can break down below the bottom of the candlestick, then I think that it’s likely that the Aussie will go looking to the 0.68 level. After that, we could open up a move down to the 0.67 level. If we were to break down below the 0.67 level, then that would be a major turnaround in the market, and perhaps open up a rush of selling.

On the other hand, if we were to rally at this point, the 50-day EMA just above is going to cause a little bit of technical resistance, and then possibly the 0.70 level. The 0.70 level is a major area of noise all the way to the 0.7050 level. If we were to break above the 0.7050 level, then it’s possible that we could go much higher. If we break above there, then we would be looking at a potential move to the 200-day EMA.

This is a market that I think continues to show negativity, so I like the idea of shorting signs of exhaustion if we get those. At this point in time, it’s likely that we will see the US dollar strengthen given enough time. However, I think it continues to be very noisy to say the least, so it’s likely that we will have plenty of short-term selling opportunities in what is going to be a longer-term move.

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As long as traders on Wall Street believe that they can get cheap or free money, get a rally.

• The AUD/USD currency pair has been back and forth during most of the session on Thursday as we have the Non-Farm Payroll numbers coming out for Friday.
• This suggests that we are more likely than not going to see some type of resolution finally.
• The 0.70 level above is the beginning of significant resistance, so it is most likely going to be in the area that we need to pay close attention to. If we were to break through that area, it would set quite a precedence in this market.

Break Above 0.7050

Breaking above 0.7050 level could kick off a longer-term rally in the Australian dollar, perhaps driven by the market’s desire to force the Fed to lower interest rates. The jobs number on Friday will have a major influence on where we go next, because if the jobs number comes out far too strong, then people will be worried that the Federal Reserve cannot bail out Wall Street. For the last 14 years, the Federal Reserve has served the interest of hedge funds and investment banks, but now they have to worry about inflation. Inflation running out of control is the type of thing that causes civil unrest.

It is because of this that we may be entering a new paradigm, but the end result will more likely than not be the same. In other words, I hate to say this but it’s probably back to the “bad news is good news” type of attitude that the market had for so long. If the jobs number is relatively light, it’s likely that what we have next year rally in the market because Wall Street will be convinced that they will get their sugar from Uncle Jerome. On the other hand, if the jobs number comes out far too strong, people will begin to worry that the Federal Reserve is actually serious about fighting inflation, which of course would be bad for Wall Street as markets have nothing to do with the economy.

Once you understand that it’s about monetary flow and has nothing to do with the companies involved, you begin to understand that this is a bet on Federal Reserve policy more than anything else. This is especially true with the NASDAQ 100, as it is so highly levered to the interest rate situation to begin with. As long as traders on Wall Street believe that they can get cheap or free money, get a rally.

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Significant Selling near $1.0300.

My previous EUR/USD signal on 18^th July was not triggered as there was no bearish price action when the key resistance level at $1.0121 was first reached.

Today’s EUR/USD Signals

Risk 0.75%.

Trades may only be entered between 8am and 5pm London time today.

• Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.0211 or $1.0245.
• Place the stop loss 1 pip above the local swing high.
• Move 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 50 pips in profit and leave the remainder of the position to run.

Long Trade Ideas

• Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0073, $1.0042, or $1.0000.
• Place the stop loss 1 pip below the local swing low.
• Move 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.

EUR/USD Analysis

In my last analysis of the EUR/USD currency pair on 18^th July, I noted that the level at $1.0121 looked attractive for a short trade entry but that if the price got established above $1.0121 later, it would signify a much deeper bullish retracement.

The level at $1.0121 in the end was not important at all, with the price easily blasting past it, but I was correct about that being significantly bullish, as the price continued to advance over the next days.

The technical picture now is different, as although we have seen the Euro make repeated attempts to rise against what has become a weaker US Dollar, bulls were simply not able to get the price beyond the $1.0300 handle, as there seems to be strong selling every time the price gets close to that area.

On the other hand, we are also seeing strong buying every time the price gets to the $1.0100 area.

This combination of strong buyer with strong sellers produces a no-man’s-land area between $1.0100 and $1.0280 within which the price can range.

Despite this overall consolidation, the shorter-term picture looks bearish, with the price breaking below $1.0211 which has held as resistance.

The best strategy today will probably be to look for a reversal off any key level and trade in the direction of the reversal, while being conservative about taking profits. Anyone trading without levels right now should be looking to short on minor pullbacks as they reverse back into the trend.

Any surprise from the Bank of England later (a 0.50% rate hike is expected) could also cause volatility in the Euro, so that is worth keeping an eye on.

There is nothing of high importance scheduled today regarding either the EUR or the USD.

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The USD/ZAR has stayed within the lower depths of its five day range and the consolidated price action may create speculative potential for traders.

The USD/ZAR opened its trading early this morning by testing lows again, but actually creating incrementally higher support via a short term technical perspective per its results. The USD/ZAR currency pair touched the 16.41560 ratio to start the day, put in a reversal higher, and then plunged lower again – but this time around only hit the 16.43650 vicinity approximately. As of this writing the USD/ZAR is trading near the 16.56500 mark with rather quick results.

Last Week’s Volatility Shows Signs of Consolidation, but Do Not be Fooled

Trading the last three days of the week produced rather dramatic reactions via the USD/ZAR as the currency pair was hit by dynamic shifts in behavioral sentiment. Except for all of its bluster and ability to trade lower, which brought the USD/ZAR to a low of nearly 16.39000 momentarily on 29^th of July, the pair remains within the higher realms of its long term trading range. Yes, it has sold off and the lower part of its short term realms are being tested, but the USD/ZAR has not escaped the clutches of its bullish mode when a six month chart is examined.

Behavioral Sentiment Shift Geared towards Selling may Take Time to Build

Traders expected to capture selling momentum cannot be blamed, but the direction of the USD/ZAR may prove more complicated than a mere tumble downwards.  The bullish trend of the USD/ZAR has been strong and support levels may prove more durable than anticipated by many. The USD/ZAR is not likely to accelerate to fresh lows instantaneously; it may have to happen via rather challenging choppy conditions. The consolidated range of the USD/ZAR should be tested carefully. Resistance levels near the 16.56000 to 16.58000 ratios should be watched. If they are broken higher, this will cause nervousness.

• If short term resistance levels near the 16.56000 to 16.58000 prove durable over the next couple of days this could be a bearish signal.
• Risk taking tactics while looking for downside momentum may prove worthwhile, but stop loss orders should be considered.

The near term for the USD/ZAR may produce more selling, but traders should not become overly ambitious.  Plenty of risks are still lurking in the shadows regarding the global economic landscape, which could affect the USD/ZAR quickly and cause a buying trajectory to suddenly emerge. However, if Forex and other financial markets remain calm in the short term, selling the USD/ZAR could prove to be a solid wager, but as always it will carry risks.

USD/ZAR Short-Term Outlook

Current Resistance: 16.57100

Current Support: 16.51500

High Target: 16.65600

Low Target: 16.40500

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The support level at $20,153 is under threat.

Previous BTC/USD Signal

My previous signal on last Thursday produced a minor short trade which broke even, setting up after the price action rejected the descending trend line shown in the price chart that day.

Today’s BTC/USD Signals

Risk 0.50% per trade.

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

Long Trade Ideas

• Go long after a bullish price action reversal on the H1 timeframe following the next touch of $20,153 or $19,164.
• 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 Idea

• Go short after a bearish price action reversal on the H1 timeframe following the next touch of $21,141.
• 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 last Thursday that I saw the outlook as remaining basically bearish if the price remained below the descending trend line, but I also noted we have seen buying below the big round number at $20k so we might see a pause in the trend here, or even a temporary reversal.

This was a good call as this did produce a short trade although one that barely made any profit at all, as the price initially moved down from the trend line.

However, the technical picture has become less bearish and more consolidative, as my note that the price may not be able to stay below $20k has been timely – we are still seeing buying down there, probably from long-term strong hands.

The short-term action is bearish and suggests that the price may well now break down below the support level at $20,153. A problem for trades is that the two closest key levels both look very questionable. It is the more distant levels at $23k and $19,164 which look likely to be more reliable as support and resistance.

I see the best potential opportunity which might set up today as a long trade from a bullish bounce at or very close to $19,164. First, the price will have to break down below $20,153 and fall quite strongly.

A daily close below $19,164 at the end of the New York session would be a very bearish sign and suggest that the price is ready to begin another leg down to the next key support level at $13,764.

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

Strong support is likely at $1.2161.

My last GBP/USD signal on 20^th June was not triggered, as the bearish price action took place a bit higher than the key resistance level at $1.2260.

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 $1.2161.
• 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 $1.2338 or $1.2386.
• 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 20^th June that the price was quite evenly balanced between equally spaced support and resistance levels. This plus the fact that it is a Monday with no major news or data releases scheduled, suggested that the price was likely to be very unpredictable and choppy today. I expected it would move only by a little and remain between the nearest key support and resistance levels.

This was a mixed call as I was wrong about the nearest resistance level holding. However, I was correct about there being little, choppy price movement over the course of the day.

The price chart below shows very clearly that the price has continued to make a relatively wide and choppy consolidation between $1.2338 and $1.2161. This has been going on for two weeks which is quite a long time. We will see a breakout eventually and there is more fundamental optimism over the US Dollar than the British Pound so the odds are it will be a bearish breakdown.

I think the levels are likely to hold today and maybe for longer, as it looks like this week will see a quiet Forex market with few major data releases scheduled – we are also getting into the summer period where market action tends to quieten down.

This means that the best trade entry likely to set up today would be either a short trade from $1.2338 or a long trade from $1.2161. I will be happy to take either if there is a suitable reversal printing with a rejection of either key level.

Regarding the USD, there will be a release of CB Consumer Confidence data at 3pm London time. There is nothing of high importance scheduled for today concerning the GBP.