The GBP/USD fell to long term lows yesterday, but the trading occurred as a bank holiday was being celebrated in Britain.

The GBP/USD is trading near the 1.17180 mark as of this writing.  For traders who turned their head’s away yesterday and didn’t pay attention, the GBP/USD currency pair fell to a low of nearly 1.16480, thus today’s higher trading value may be considered a potential bright spot. But before traders are tempted to believe the worst is over for the British Pound, they might want to consider the following.

The notion that Great Britain was celebrating its ‘end of summer’ holiday yesterday and banks were officially closed meant that British institutions weren’t actively trading.  The notion that an ‘unprotected’ British Pound was left to the sentiment of international trading houses and sold off with a rather large amount of gusto is troubling. It could be a sign that behavioral sentiment globally views the GBP/USD as still being too highly valued.

GBP/USD Bullish Traders may believe the Forex pair is oversold but should be careful

The last time the GBP/USD traded at yesterday’s lows was during the height of coronavirus fear when the Forex pair went to within sight of the 1.14225 ratio momentarily in March of 2020. Yes, this time is different than the coronavirus experience, but the question if it is a better economic circumstance should be asked. Economic outlooks and central bank interest rate policies remain troubling for Great Britain and its global counterparts. The fact the U.S Fed seems intent on maintaining a hawkish interest rate policy is playing havoc with the GBP/USD too.

• The 1.17000 level should be watched closely, if it falters again short term, this could be a bearish signal.
• Later this week jobs data from the U.S is certain to create more volatility for the GBP/USD, and financial institutions may be positioning now for the statistics that will come on Friday.

Current Support Levels should be monitored for Additional Signals from the GBP/USD

If the 1.17000 were to prove vulnerable again and trading is sustained below this ratio, it would be a troubling signal for the GBP/USD. Yesterday’s move towards extreme lows may not be repeated short term, but it is a reminder that sentiment remains fragile. If current support begins to falter, traders could not be blamed for wagering on marks below the 1.17000 that target 1.16900 for quick hitting results if they are willing to bet on downside price action. Conditions will likely remain choppy in the GBP/USD and its bearish trajectory shows few signs of relenting in the near term.

GBP/USD Short Term Outlook:

Current Resistance: 1.17239

Current Support: 1.17010

High Target: 1.17580

Low Target: 1.16510

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Price has room to fall to the 0.6800 area.

My previous signal last Monday produced a profitable long trade from the bullish rejection of the support level at 0.6882, but it barely gave the minimum 20 pips of profit so would have broken even in practise.

Today’s AUD/USD Signals

Risk 0.75%

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

Short Trade Idea

Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.6884 or 0.6953.

• 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.
• Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.

Long Trade Ideas

• Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.6797 or 0.6784.
• 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.
• Remove 50% of the position as profit when the price reaches 20 pips in profit 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.

AUD/USD Analysis

I wrote in my previous forecast on 22^nd August that although the AUD/USD currency pair was rising, the price would probably turn bearish again later, not being able to get established above 0.6964.

This was a relatively good call as the dominant price movement for the day was downwards and the price never even reached 0.6964.

The Aussie stood out last week as the only major currency which ended the week slightly higher than the strong US Dollar. However, this currency pair fell sharply in favour of the Dollar just like every other pair did Friday after Powell’s hawkish speech at Jackson Hole strongly boosted the greenback, which has continued to advance since this week’s open. Interestingly, the Aussie has falled during Monday’s Asian session just as strongly as most other currencies, which suggests that any residual strength in the Aussie is being wiped out.

We have bearish momentum and this may slow down or even reverse, however the odds have to be that nothing will change sentiment and we will see further gains by the US Dollar later. The price here has room to fall, with no obvious key support levels until the round number at 0.6800.

I see a short trade from a bearish reversal following a bullish retracement to at least 0.6875 as potentially the most attractive trade setup we might see here today.

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

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There is a possibility that the EUR/USD will continue falling as sellers target the next key support at 0.9850.

Bearish view

• Sell the EUR/USD and set a take-profit at 0.9850.
• Add a stop-loss at 1.0035.
• Timeline: 1-2 days.

Bullish view

• Set a buy-stop at 1.0025 and a take-profit at 1.0095.
• Add a stop-loss at 0.9950.

The EUR/USD price continued its bearish trend after a series of hawkish statements by the European Central Bank (ECB) and Federal Reserve officials. It dropped to a low of 0.9963, which was slightly lower than last week’s high of 1.0095.

Hawkish ECB and Fed

The EUR/USD resumed its bearish trend as investors reacted to last week’s Jackson Hole Symposium comments. In his speech, Jerome Powell reiterated that there will be some pain for both investors and consumers as it continued to battle the soaring inflation.

He said that the bank will continue with its hawkish tone until it sees a clear sign that inflation has started dropping. Data published this month showed that the headline inflation in the US dropped from 9.1% in June to 8.7% in July.

And on Friday, the closely watched PCE data showed that the country’s inflation continued dropping as gasoline prices pulled back. Therefore, analysts were expecting the Fed to start slowing down its hawkish tone in the coming meetings.

The EUR/USD price also dropped after several ECB officials reiterated that the bank will continue hiking rates in the coming months. Speaking at the Jackson Hole Symposium, Isabel Schnabel and Francois Villeroy Galhau said that a large sacrifice will be needed to tame inflation.

The two officials believe that the bloc’s inflation will continue soaring in the coming months. Analysts expect that the bloc’s inflation rose to a record 9% in August as gas prices surged. European gas prices rose to a record high of 343 euros per megawatt hour, which is sharply higher than where they were when the year started.

As a result, the EU will convene an emergency meeting to deliberate on the way forward since these prices mean that the bloc will likely head to a deep recession.

EUR/USD forecast

The four-hour chart shows that the EUR/USD pair has been in a strong bearish trend in the past few weeks. It managed to move below parity level for the second time this year last week. As a result, the pair remains below the 25-day and 50-day moving averages and is slightly above last week’s low of 0.9903.

The EUR/USD pair has also formed what looks like an inverted cup and handle pattern. Therefore, there is a possibility that it will continue falling as sellers target the next key support at 0.9850.

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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 resume the bearish trend as sellers target the next key psychological level at 0.6800.

Bearish view

• Sell the AUD/USD pair and set a take-profit at 0.6800.
• Add a stop-loss at 0.7000.
• Timeline: 1 day.

Bullish view

• Set a buy-stop at 0.6965 and a take-profit at 0.7048.
• Add a stop-loss at 0.6880.

The AUD/USD price rebounded slightly as the recent US dollar rally took a breather. It rose to a high of 0.6963, which was the highest point since August 17. That price was about 1.17% from its lowest level this week.

US dollar rally takes a breather

The Australian dollar has pulled back recently amid a sustained US dollar comeback. The closely watched dollar index managed to move from this month’s low of $104.3 to over $109.30. This rally accelerated after the Federal Reserve published the minutes of the last meeting. These minutes showed that the bank was committed to continuing with the hiking process.

However, data published recently could see the bank reducing the pace of tightening. For example, on Tuesday, numbers released by S&P Global showed that the services PMI declined to 44.1 in August as demand waned and cost of doing business rose. A PMI reading of 50 and below is usually a sign that an industry is contracting.

Meanwhile, new home sales declined by 12.6% in July to 511k. This decline was worse than the median estimate of 575k. These numbers, together with the pending and existing home sales, imply that the housing sector is cooling down.

The AUD/USD price has also been in a downward trend because of the weakening Chinese economy. On Monday, the country’s central bank decided to slash interest rates in a bid to stimulate the economy. It slashed the five-year prime mortgage rate to 4.3%.

The deteriorating Chinese economy will have a negative impact on Australia. For one, analysts expect that iron ore prices will drop by half by next year because of the deteriorating housing sector in China. Analysts also expect that the Chinese economy will have a slower growth than the 5.5% that the government expects.

AUD/USD forecast

The AUD/USD slipped to a low of 0.6865 on Tuesday and then bounced back slightly after the weak US data. This price was an important one since it was the lowest point since August 5.

It has struggled moving below the support level several times since Monday. The pair is slightly above the 38.2% Fibonacci Retracement level while the MACD has tilted upwards. The pair will likely resume the bearish trend as sellers target the next key psychological level at 0.6800.

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EUR/USD plummets to new 19-year low.

My previous EUR/USD signal last Wednesday produced a losing short trade from $1.0195, although the same level was later rejected to provide the high of the day, so I was correct about that resistance level.

Today’s EUR/USD Signals

Risk 0.75%.

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

Short Trade Idea

• Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $0.9950 or $1.0000.
• 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 $0.9900, $0.9850, or $0.9800.
• 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 17th August, I saw the technical picture as more bearish following the breakdown below the ascending trend line, which was confluent with a clear level of resistance at $1.0195, which was also quite confluent with the round number at $1.0200. I saw a short from there as the best potential trade of the day and I was not wrong, although the initial rejection during the New York session saw the high exceeded again later.

The technical picture now is even more bearish, as the price plummets through blue sky to new 19-year lows which have not been seen since 2022, well below parity.

There are no obvious support levels, except perhaps round and half numbers.

There is strong bearish momentum, and longer-term traders could have a good opportunity to go short if we see a bullish retracement to $0.9950 or even the parity level at $1.0000.

Shorter-term traders can try to ride the momentum by selling rallies on short-term time frames, perhaps being cautious of trading right into any major round numbers.

Trend traders will not want to miss the bearish momentum here.There is a very strong bullish market and long-term trend in the US Dollar, with the Euro one of the weakest major currencies (the British Pound is the other), so we can expect plenty of action here today as this pair is in the market’s focus.

Concerning the USD, there will be a release of Flash Services PMI data at 2:45pm London time. Regarding the EUR, there will be releases of French, German, and British PMI data between 8:15am and 9:30am.

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Today’s recommendation on the lira against the dollar

• Risk 0.50%.
• None of the buy or sell transactions of yesterday were activated

Best selling entry points

Entering a short position with a pending order from levels of 18.33

• Set a stop-loss point to close the lowest support levels at 18.55.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the strong resistance levels at 17.70.

Best entry points buy

Entering a buy position with a pending order from levels of 17.85

• The best points for setting stop-loss are closing the highest levels of 17.54.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.

Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the support levels 18.31

Analysis of the Turkish lira

The price of the USD/TRY only moved slightly during today’s early trading, the dollar had risen near levels of 18 lira yesterday, before the pair returned to stability below this level. The dollar rose against the major currencies during yesterday’s trading after the announcement of the FOMC meeting minutes, which showed the possibility that the Fed will start moving interest rates at a slower pace depending on the circumstances and economic data. Some Fed members also saw the possibility of keeping the interest rate at elevated levels for a period of time even as inflation began to be brought under control.

Despite the dollar’s gains against most major currencies and emerging market currencies, the US currency did not move only slightly against the lira, as observers attributed the intervention of the Turkish Central Bank directly to impose a kind of stability for the lira price. It is noteworthy that the Turkish Central Bank is suffering from a decline in the volume of foreign exchange, but the bank has received support of several billions from Russia within the project to establish a nuclear plant in the country.

Turkish Lira Technical Outlook

On the technical front, the US dollar against the Turkish lira settled without changes within the same narrow trading range shown on the chart. The pair traded the highest support levels, which are concentrated at 17.85 and 17.75 levels, respectively. While the lira is trading below the resistance levels at 18.00 and 18.07, respectively. The pair is also trading above the 50, 100 and 200 moving averages, respectively, on the four-hour time frame as well as on the 60-minute time frame, indicating the long-term bullish trend. The chance of the lira rising against the dollar is still slim as the pair is heading in an overall bullish trend. As each decline of the pair represents a good buying opportunity, please adhere to the numbers in the recommendation, with the need to maintain capital management.

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Bitcoin is gently selling off on deteriorating risk sentiment.

Previous BTC/USD Signal

My previous signal on 8^th August was not triggered as there was no bullish price action when the support levels which I had identified were first reached that day.

Today’s BTC/USD Signals

Risk 0.50% per trade.

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

Long Trade Ideas

• Go long after a bullish price action reversal on the H1 timeframe following the next touch of $23,028 $22,713, 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 $23,609 or $24,466.
• 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 8^th August that the price of BTC/USD was continuing to rise gently and be held by a wide bullish price channel.

I thought that the support level I identified at $23,585 would likely be pivotal over the day.

These were good calls, as once the price broke below $23,585 it continued to fall by a considerable distance. Ten days later, the price is still trading within the same gently rising price channel but has sold off since reaching the big round number at $25k.

The selloff in Bitcoin is probably getting some tailwind from, the recovery by the US Dollar and the decline in risk sentiment following the release yesterday of FOMC meeting minutes.

The resistance level at $23,609 looks attractive for a short trade as its clearly become “stairstep” resistance so will probably be likely to hold if reached. I would want to see a rejection of the level from below and a clear bearish reversal before entering. I would be comfortable trading short today despite the rising price channel.

If the price reaches the support level at $22,713 that could be significant as it is close to the bottom of the price channel, so there is scope to hope for a medium to long-term bullish price movement beginning from a firm bullish bounce there.

https://www.tradingview.com/chart?symbol=COINBASE%3ABTCUSD

Concerning the US Dollar, there will be a release of the Philly Fed Manufacturing Index at 1:30pm London time.

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Today’s recommendation on the lira against the dollar

Risk 0.50%.

None of the buy or sell transactions of yesterday were activated

Best selling entry points

• Entering a short position with a pending order from levels of 18.33
• Set a stop-loss point to close the lowest support levels at 18.55.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the strong resistance levels at 17.70.

Best entry points buy

• Entering a buy position with a pending order from levels of 17.85
• The best points for setting stop-loss are closing the highest levels of 17.54.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the support levels 18.31

USD/TRY Technical Analysis

The lira stabilized without changes in the price of the USD/TRY currency pair as the pair is trading within a very narrow range. This is amid the absence of influential data from inside Turkey during the day, as well as the clear interference by the Central Bank of Turkey to control the price of the dollar against the lira. Investors followed reports on the Russian-Turkish consensus on the adoption of the local currency in the trade exchange between the two countries. The two sides agreed to pay part of Turkey’s natural gas imports in Russian rubles, which may contradict a series of Western sanctions against Moscow. In the same context, a report from the American Newsweek magazine stated that the percentage of Turkish real estate sales to Russian citizens increased during the current year, so that the Russians topped the purchases of real estate in Turkey before the Iranians and Iraqis. It is noting the lack of significant economic impact, especially amid the country’s suffering of inflation levels that have not been recorded for nearly 25 years.

The economic situation is not expected to improve significantly in light of the Turkish Central Bank’s adherence to a stimulus policy in exchange for monetary tightening in the United States, which raises the value of the dollar.

Turkish Lira Technical Analysis

The US dollar against the Turkish lira settled within the same narrow trading range shown on the chart. The pair traded the highest levels of support, which are concentrated at the levels of 17.85 and 17.75, respectively. While the lira is trading below the resistance levels at 18.00 and 18.07, respectively. The pair is also trading above the 50, 100 and 200 moving averages, respectively, on the four-hour time frame as well as on the 60-minute time frame, indicating the long-term bullish trend. The chance of the lira rising against the dollar is still slim as the pair is heading in an overall bullish trend. As each decline of the pair represents a good buying opportunity, please adhere to the numbers in the recommendation, with the need to maintain capital management.

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Breakdown below supportive trend line confluent with resistance.

My previous EUR/USD signal last Thursday were not triggered.

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be taken before 5pm London time today only.

• Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.0195, $1.0220, $1.0240, or $1.0269.
• 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.
• Remove 50% of the position as profit when the price reaches 50 pips in profit and leave the remainder of the position to ride.

Long Trade Idea

• Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0073.
• 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.
• Remove 50% of the position as profit when the price reaches 20 pips in profit 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.

EUR/USD Analysis

In my last analysis of the EUR/USD currency pair on 11^th August, I noted that we were seeing the price sell off continuously following the spike up to the $1.0350 area.

I thought that both the nearest support levels at $1.0250 and $1.0202, as well as the nearest support level at $1.0294, looked firm and likely to hold at least for a while when next reached.

This call was not useful during the day, but the next morning when $1.0294 was first reached, a long scalp could have produced a few pips of profit.

The technical picture now is more bearish, as we have seen the price break down and get established below the ascending trend line, which was formerly supportive, shown within the price chart below. This trend line has now become resistant, and it is confluent with a clear level of resistance at $1.0195, which is also quite confluent with the round number at $1.0200.

The best trade which might set up here today will likely be a short trade from a bearish reversal off $1.0195 – if the rejection also touches the $1.0200, that will be even better.

The price has plenty of room to fall before reaching any key support levels, but it is likely we will still see strong support the closer we get to the parity level, which again begins to come into view now.

Concerning the USD, there will be a release of Retail Sales data at 1:30pm London time, followed by the FOMC Meeting Minutes at 7pm. There is nothing of high importance scheduled today regarding the EUR.

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