Price has room to fall to $1.1958.

My previous GBP/USD signal last Tuesday could have produced a profitable short trade from the bearish rejection of the resistance level which I had identified at $1.2130, which capped the day’s high price right to the pip.

Today’s GBP/USD Signals

Risk 0.75%.

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

• Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of $1.1958 or $1.1926.
• 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 $1.2100 or $1.2170.
• 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 9^th August that we had new lower resistance at the very clearly defined level of $1.2130, which was somewhat confluent with the upper trend line of the price channel.

I thought a short trade from a bearish reversal at that level would likely be the best set up in this currency pair, and that was a good and accurate call.

The price rose in the later section of last week, but we have seen the US Dollar make a recovery so far again this week, making gains against the British Pound yesterday. This downwards price movement looks most likely to continue, as we see a bearish technical situation with the price selling off within descending bearish wedge chart patterns. Even more significantly, there are no key horizontal support levels until $1.1958, so the price has plenty of room to fall further. However, it is possible that the big round number at $1.2000 could be supportive if reached.

The British Pound is relatively weak as the UK economy is widely seen as having a poor outlook, with the Bank of England forecasting peak inflation later this year above 13%, and a recession lasting five quarters.

I would not pay much attention to the trend lines shown in the price chart below, but a bearish reversal from $1.2100 if we get a retracement later could be a good short trade opportunity. Scalpers might find short trades on retracements below that level, as long as the price is above or has cleared $1.2000.

There is nothing of high importance due today regarding either the GBP or the USD.

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The AUD rose on a minor risk-on rally.

My previous signal on 30^th June was not triggered, as none of the key support and resistance levels were reached that day.

Today’s AUD/USD Signals

Risk 0.75%

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

• Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of the descending trend line shown in the price chart below which currently sits at about 0.6898, or 0.6915.
• 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 0.6848 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 30^th June that we had a consolidation pattern consolidation reinforced by a narrowing triangle formation which was holding the price, suggesting that the best opportunity which could set up here over the day was a long from another rejection of the level at 0.6848. This did not set up – the price held within the triangle until the Asian session, when it fell strongly enough to cleanly break through that support level.

The Australian Dollar is in focus right now for two reasons:

1. The minor risk rally seen over recent hours has pushed the price up close to the long-term descending trend line, which is shown within the price chart below.

2. The RBA is expected to shortly hike its interest rate by 0.50%. Any deviation from this will certainly cause a major price movement here in the AUD/USD currency pair.

It looks as if we may have an opportunity for a short trade from a bearish reversal at either the descending trend line or the horizontal resistance level at 0.6915. I would be happy to enter either trade. On the other hand, if the price rises after the RBA’s release and holds up for a few hours above the resistance at 0.6915, that would be a significant bullish breakout and suggest the beginning of a stronger bullish price movement.

You can trade my forecasts in a real or demo Forex brokerage account according to whether you want to strengthen your self-confidence before depositing real funds with a suitable Forex / CFD broker.

Concerning the AUD, there will be a release of the RBA’s Cash Rate and Rate Statement at 5:30am London time. There is nothing of importance scheduled today regarding the USD.

Buyers remain below $20k.

Previous BTC/USD Signal

My previous signal last Thursday was not triggered, as none of the key support or resistance levels which I had identified that day were reached by the price.

Today’s BTC/USD Signals

Risk 0.50% per trade.

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

Long Trade Idea

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

• Go short after a bearish price action reversal on the H1 timeframe following the next touch of $20,827, the descending trend line, or $23,000.
• 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 Thursday that we were seeing a bearish consolidation between $20k and $23k, with the current dominant wave at the time of writing being bearish.

I thought that longer-term traders should look for a short from another reversal at $23k or wait for a daily close below $19,500 which would be a very bearish sign.

This was a good call insofar as I was correct to look to the short side – the price fell over the day – and I was right to refuse to look for any long trades.

The technical picture now is still bearish over the longer and medium terms. There is a clear and strong long-term downwards trend, and the medium-term picture is dominated by the descending trend line which is shown in the price chart below.

I see the outlook as remaining basically bearish if the price remains below this descending trend line, but it should be noted that after last week’s strong fall of approximately 30% in value, we have seen buying below the big round number at $20k over the past few days. It might be that the downwards trend is going to pause here, or even reverse for a while.

I think the best approach here will be to take a short trade from a bearish reversal which might set up at the descending trend line or following a daily (New York) close below $19,164.

If the price can get established above $23k, which I think is unlikely to happen, that would be a surprising bullish sign and indicate a deeper bullish retracement would probably happen quite quickly.

Concerning the US Dollar, the Chair of the Federal Reserve will be testifying before the House of Representatives at 3pm London time. There is nothing of high importance due today regarding Bitcoin.

We still await the SEC lawsuit decision before we see real traction.

Ripple tried to rally again on Monday but simply cannot get off of its back. This is not a huge surprise, because most of crypto looks rather anemic. Add to the fact that Ripple is dealing with an SEC lawsuit that seems like it’s never going to end, there’s no real reason to think that Ripple was suddenly going to rip to the upside. Quite frankly, it’s probably more likely that it does the exact opposite.

At this point, the $0.40 level looks to be a bit of a magnet for the price, but I believe that we are about to break down again, based on the technical pattern on the chart. The descending triangle measures for a move to $0.30, and I think that move could be rather quick. If we get some type of negative momentum in the crypto markets overall, that will be reason enough for Ripple to fall. While once thought of as a potentially strong project, Stellar Lumens can do the same thing without the SEC causing headaches.

That being said, it’s worth noting that the market is going to be highly sensitive to the rest of crypto, so if we do get some type of bullish run in other markets, that could translate into a short-term balance for Ripple. However, I would not get overly excited about any rally and would look at it with suspicion. In fact, I will probably find an offshore exchange to start shorting this market again, especially near the 50-day EMA.

Longer term, I think Ripple could be interesting. However, I believe you are probably going to get an opportunity to buy it at much lower levels, perhaps as low as $0.20 if you are patient enough. At that point, I might buy some and stick it in a wallet somewhere to simply forget about it. If it works out, great. If it does not, that’s okay as well, as it won’t be a major loss in the big scheme of things.

While Ripple does have a lot of traction in some parts of the world, not being able to use the US banking system is going to be a major weight around its neck, so we still await the SEC lawsuit decision before we see real traction.

Gold futures contracts are on track to achieve the worst performance for one session in two months, as they fall below $1900 with the start of this important week’s trading. The price of gold fell to the $1855 support level, its lowest in two and a half months. Gold prices have come under heavy pressure from rising Treasury yields and a stronger US dollar. According to the latest performance, gold is retreating from a weekly loss of more than 1%, trimming its annual gain to less than 2%.

All in all, the precious metal is on track for its biggest daily drop since March 9.

As for the price of silver, the sister commodity to gold, it is also declining with the beginning of this week’s trading. Silver futures fell to $22.64 an ounce. The price of the white metal fell more than 4% last week, increasing its loss in 2022 by 3%. Commenting on the performance, Jim Wyckoff, Senior Analyst at Kitco.com wrote: “Precious metals are being affected earlier this week by bearish external market forces, the strong US dollar index approaching a 20-year high, the strong decline in US crude oil prices and bond yields.”

US Treasury yields were higher across the board, with the 10-year bond yield rising to 2.979%. One-year bond yields rose to 2.066%, while 30-year bond yields increased 0.102% to 3.048%.

Gold is generally sensitive to a higher interest rate environment because it raises the opportunity cost of holding non-yielding bullion.

The US Dollar Index (DXY), which measures the performance of the US currency against a basket of other major currencies, rose to 103.71, from an opening at 103.18. Overall, the index had a brutal start to 2022, rising more than 8%. Over the past 12 months, the DYX US Dollar Index is up 14%.

In general, a stronger US dollar profit is bad for dollar-priced commodities because it makes them more expensive to buy for foreign investors.

Meanwhile, the Federal Reserve will conclude its two-day Federal Open Market Committee (FOMC) meeting on Wednesday. The Eccles Building is expected to raise the benchmark federal funds rate by 50 basis points in the market. Investors are also widely expected that the central bank will pull the trigger on another 50 basis point rise in June. Despite high inflation and a negative headline GDP reading in the first quarter, gold is weakening due to a tightening economy.

In other metals markets, copper futures fell to $4.2605 a pound. Platinum futures fell to $931.30 an ounce. Palladium futures fell to $2,203.00 an ounce.

According to gold technical analysis: On the daily chart, the price of gold is moving within a bearish channel that was formed recently and its momentum increased with breaking the level of $1900 for an ounce. Technical indicators moved towards a bearish direction as soon as the price moved towards the support level of 1855 dollars. Currently, the price of gold is heading towards new buying levels, the most prominent of which are currently 1848 and 1830 dollars, respectively. I still prefer buying gold from every bearish level, as global geopolitical tensions, and the return of anxiety over the outbreak of the epidemic led by China will support the purchase of gold as a safe haven in the end.

On the other hand, in order for the bulls to regain control, the resistance of 1900 dollars per ounce must be breached. The gold market will be affected today by the level of the US dollar and the extent to which investors take risks or not.