Still selling off from yesterday’s spike to above $1.0350.

My previous EUR/USD signal last Thursday 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 4^th August, I noted that we were seeing strong selling every time the price got near the $1.0300 handle, but also strong buying every time the price approached the $1.0100 area.

This was a good call as the price remained ranging within this area until yesterday’s news about lower-than-expected US inflation sparked a selloff in the US Dollar, sending the price breaking out of its consolidating triangle chart pattern and spiking up to an area above $1.0350.

It is interesting that the spike not only did not last, but that we are seeing the price continue to descend consistently, with the price now trading well below $1.0300 and returning to the area of its medium-term consolidation.

This shows that the Euro is a relatively weak currency, so trading this pair long even when the US Dollar is weak is maybe not a good idea. There are other currency pairs that seem to be working better with Dollar weakness, such as any of the commodity currency pairs such as AUD/USD, NZD/USD, or USD/CAD.

Both the nearest support levels at $1.0250 and $1.0202, as well as the nearest support level at $1.0294, look firm and likely to hold at least for a while when next reached. I think scalping off reversals at any of these levels, especially $1.0250 which looks especially attractive, will be the best strategy to use in trading this pair today.

Concerning the USD, there will be a release of PPI data at 1:30pm London time. There is nothing of high importance scheduled today regarding the EUR.

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The pair will likely keep rising as bulls target the next key resistance point at 26,000.

Bullish View

• Buy the BTC/USD pair and set a take-profit at 26,000.
• Add a stop-loss at 22,500.
• Timeline: 2 days.

Bearish View

• Set a sell-stop at 23,800 and a take-profit at 22,000.
• Add a stop-loss at 25,000.

The BTC/USD price made a bullish breakout as demand for cryptocurrencies rose. The pair crossed the important resistance point at 24,000, which was the highest point since July 30th of this year. Bitcoin has recovered by more than 36% from its lowest level this year.

Cryptocurrency Recovery Continues

Bitcoin has had a relatively difficult year as worries of high-interest rates rose. It dropped from last year’s high of almost $70,000 to about $18,000. Recently, however, bitcoin and other cryptocurrencies have staged a strong recovery, bringing their total market cap to over $1.1 trillion.

This recovery has happened at a time when the Federal Reserve has ramped up its rate hikes. The bank hiked interest rate hike by 0.75%, bringing the total year-to-date increase to 225 basis points. Analysts expect that the bank will continue hiking rates this year, especially after the strong US jobs data.

Data by the Bureau of Labor Statistics (BLS) showed that the American economy added over 528k jobs in July. The unemployment rate dropped from 3.6% to 3.5% while wages continued rising. As a result, some Fed officials, including Mary Daly hinted that the bank will hike rates by 0.50% in September.

The next key economic data to watch will be the upcoming US consumer price index (CPI) data. Economists expect the data to reveal that the country’s inflation slipped slightly in July as gasoline prices retreated.

The BTC/USD price also bounced back because of the strong correlation between technology stocks and cryptocurrencies. The Nasdaq 100 index, which is made up of the biggest tech companies, has risen by about 20% from the lowest level this year. This means that the index is exiting the bear market.

BTC/USD Forecast

The four-hour chart shows that the BTC/USD price has been in a strong bullish trend in the past few weeks. The pair has moved above the 25-day and 50-day moving averages. At the same time, the MACD has moved above the neutral point.

Notably, the pair has formed an ascending triangle pattern that is shown in green. In price action analysis, this pattern is usually a bullish sign. It has moved to between the 50% and 38.2% Fibonacci Retracement level.

Therefore, the pair will likely keep rising as bulls target the next key resistance point at 26,000. A drop below the support at 23,000 will invalidate the bullish view.

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The pair will likely have a breakout in the coming days.

Bearish View

• Set a sell-stop at 19,600 and a take-profit at 18,000.
• Add a stop-loss at 21,500.
• Timeline: 1 day.

Bullish View

• Set a buy-stop at 20,800 and a take-profit at 22,000.
• Add a stop-loss at 18,000.

The BTC/USD price held steady at the 20,000 range as concerns about the crypto industry continued. Bitcoin is trading at $20,500, which is slightly above last week’s low of $18,622.

Has the Sell-Off Capitulated?

Bitcoin has been in a remarkable downward trend in the past few months as investors continue worrying about the industry. It is not alone considering that other cryptocurrencies like Ethereum, Ripple, and Cardano have all dropped. In total, the market cap of all cryptocurrencies has crashed from an all-time high of $3 trillion to below $1 trillion.

The BTC/USD pair tilted higher during the American session even after the relatively hawkish minutes by the Federal Reserve. The bank’s officials said that a more restrictive policy will continue in the coming months in a bid to fight inflation. That statement set the stage for another above normal rate hike of either 0.50% or 0.75%. The statement said:

“Many participants judged that a significant risk now facing the committee was that elevated inflation could become entrenched if the public began to question the resolve of the committee to adjust the stance of policy as warranted.”

Bitcoin rose in line with the performance of American equities as the Dow Jones, Nasdaq 100, and S&P 500 rose by more than 0.50%. Still, it is worth noting that stocks and Bitcoin and stocks tend to rise after Fed decisions and minutes and then erase these gains the following day.

Bitcoin is also reacting to corporate activity about cryptocurrencies. On Tuesday, Voyager Digital, a large Canadian exchange went bankrupt. In a positive sign, Nexo decided to acquire Vauld, a company that was on the verge of going bankrupt. FTX has also acquired BlockFi while Celsius is fighting for survival.

BTC/USD Forecast

The four-hour chart shows that the BTC/USD pair has been in a consolidation phase in the past few days. As a result, it has formed what looks like a symmetrical triangle pattern that is shown in purple. Now, this triangle is nearing its confluence level, meaning that a bullish breakout is likely. The pair is slightly above the 25-day moving average while the MACD has moved slightly above the neutral point.

Therefore, the pair will likely have a breakout in the coming days. While it is hard to predict, this breakout will likely be bearish since the triangle is likely a bearish pennant. If this happens, the next key support will be at 17,577.

 

The best opportunity is likely to be long from supportive confluence.

My previous signal on 27^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 must be entered before 5pm Tokyo time Friday.

• Go short 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 0.6943.
• 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 0.6848 or 0.6774.
• 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 27^th June that we had a fairly wide and choppy consolidation pattern playing out between the very big round number at 0.7000 which is acting as resistance, and the nearest support level at 0.6840. I thought that the price would remain between these levels, and it did. In fact, three days later it continues to do so.

The technical picture now remains consolidative but interesting, with the consolidation reinforced by a narrowing triangle formation which is holding the price, shown in the price chart below. The lower edge of this triangle is very close to what looks to be a strong support level at 0.6848, which already held a few hours ago.

I think the best opportunity which could set up here today would be a long from another rejection of this level at 0.6848. I am not so keen on a short trade from the top of the triangle at 0.6943.

If the price does break below 0.6848, and can end the day trading firmly lower, that would be a very bearish sign and suggest a continuing fall to new long-term lows would be likely. This would probably require another major downwards move in stocks to happen due to the Aussie’s status as a risk barometer.

Concerning the USD, there will be a release of Core PCE Price Index data at 1:30pm London time. There is nothing of importance scheduled today regarding the AUD.

There is a possibility that the pair will drop to the key support at 1.0540 as the triangle pattern nears its confluence.

Bullish View

• Set a buy-stop at 1.0615 and a take-profit at 1.0700.
• Add a stop-loss at 1.0550.
• Timeline: 1-2 days.

Bearish View

• Sell the EUR/USD and set a take-profit at 1.0500.
• Add a stop-loss at 1.0650.

The EUR/USD pair rose to an important resistance level after a hawkish statement by Christine Lagarde. The pair rose to a high of 1.0615, which was the highest level since June 10th of this year. It has risen by more than 2.2% above the lowest level this month.

Christine Lagarde Points to Rate Hike

The EUR/USD pair rose as Christine Lagarde of the European Central Bank made a statement during the American session.

In it, she reiterated that the bank was focused on fighting inflation. It has already reduced its bond market activity and is now set to deliver its first interest rate hike in years in July. She signaled that the rate hike will be 0.25%. Most importantly, she will pull the ECB out of negative interest rates in September. Lagarde will deliver more remarks on Tuesday.

The EUR/USD also reacted to the latest strong numbers from the United States. Data by the Commerce Department showed that durable goods orders rose from 0.4% to 0.7%, which was higher than the expected 0.1%. Core durable orders rose from 0.2% to 0.7% in May as demand continued rising.

Meanwhile, after two weeks of weak housing data, the US published surprising pending home sales data. According to the National Association of Realtors, pending home sales rose by 0.7% in May compared with April. This was a surprise since pending home sales dropped in the previous six straight months.

Pending home sales rose even as the 30-year fixed mortgage rate rose to 5.64%. At the same time, the supply of homes has started rising, according to Realtor.com.

The next key data to watch will be the upcoming US consumer confidence number by the Conference Board. Analysts expect the data to show that consumer confidence dropped to 100 in June as inflation surged.

EUR/USD Forecast

The EUR/USD pair has formed an ascending triangle pattern on the four-hour chart. It moved to the upper side of this triangle and it remains slightly above the 25-day and 50-day moving averages. The Stochastic Oscillator has moved slightly below the overbought level.

The pair formed an evening star pattern, which is usually a bearish sign. Therefore, there is a possibility that the pair will drop to the key support at 1.0540 as the triangle pattern nears its confluence. In the coming days, it will likely have a bullish breakout as bulls target the key resistance at 1.0700.

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.

The overall attitude of the market has been one that has gone higher, despite the fact that it is not necessarily a clean market right now

The West Texas Intermediate Crude Oil market has rallied quite nicely during the trading session on Friday as we continue to bang around in a major symmetrical triangle. You can see that I have clearly drawn this on the chart, and the uptrend line continues to offer a bit of resistance. It is worth noting that we are close to the highs from a couple of weeks ago, and at this point, if we were to break above the $111 level, it is likely that the market will continue to go higher.

In that scenario, the market would probably go looking to reach the $115 level, possibly even the $120 level. The market pulling back also makes just as much sense, because of the resistance that we have seen tested multiple times. If we were to pull back, that does not necessarily mean that is time to start selling oil, just that we may have to go looking for value yet again. The 50 Day EMA would be an area that you need to pay close attention to as it has been dynamically supportive more than once.

After that, there is an uptrend line underneath that comes into the picture as well, that is the bottom of the symmetrical triangle. At this point, the market continues to be very choppy, so you need to be cautious with your position size. However, it is probably worth noting that the overall attitude of the market has been one that has gone higher, despite the fact that it is not necessarily a clean market right now as far as a direction or trend is concerned. Notice that the 50 Day EMA continues to rise as well, and when you look at this chart, this is a perfect example of how people typically use moving averages, as it shows a slight “lean to the upside.”

If we were to break down below the uptrend line, which is essentially the $100 level, it is possible that the WTI Crude Oil market goes looking to reach the 200 Day EMA underneath. That would be somewhere near the $90 level, which is of course a psychologically important level, but it is also an area where we had seen a lot of noise back in February. Because of this, it does make a certain amount of sense that we revisit that area, but only if we get a sudden shock to the system. As things stand right now, it looks like it is much easier to go higher.

At this point, we have not broken out of the triangle, so I believe all traits have to be thought of as more or less a potential range-bound type of situation.

The West Texas Intermediate Crude Oil market initially tried to rally on Tuesday but gave back gains as we started to see more negativity around the world. The oil market has been bouncing around in a triangle for a while, so it does make a certain amount of sense that we continue to test both sides of it. That being said, we are racing toward the uptrend line, which could bring a lot of noise into the picture.

If we break down below the uptrend line, then it is likely that oil will continue to dive, reaching towards the $95 level, and then eventually the $90 level. I do not have much interest in trying to guess when or if we break down below this uptrend line. I will simply wait for some type of a daily close outside of this triangle to place my next longer-term trade.

It is worth noting that we broke below the 50-day EMA, but it is not the first time that we have since we have formed the triangle. In other words, although it is a negative turn of events, it is not necessarily one that I am overly concerned with. The market will continue to be one that is very noisy, due to the fact that there are so many confusing and conflicting inputs. The overall global economic picture is one of inflation, and perhaps a slowdown, both of which could cause problems for the oil market. If demand drops due to the economy slowing, then obviously there is a problem here. On the other hand, there are concerns about a lack of supply due to the Russian oil that is not hitting the markets. Adding more angst to the market is the fact that so much time had been spent not drilling during the pandemic.

The market breaking above the highs of the trading session on Tuesday would be a very bullish sign, perhaps opening up the possibility of a move back to the $110 level, which coincides with the downtrend line above. At this point, we have not broken out of the triangle, so I believe all traits have to be thought of as more or less a potential range-bound type of situation.

The market is more likely than not going to continue to see buyers on dips, as we have seen for quite some time.

The West Texas Intermediate Crude Oil market pulled back just a bit on Tuesday as we continue to see a lot of consolidation in this market. Regardless, there does seem to be a lot of buying pressure underneath, and it does suggest that every time we pull back there will more than likely be buyers willing to step in and push this market higher. The 50-day EMA sits just above the $100 level, and I think a lot of people will look at that as a potential support level.

If we were to break down below there, then it is possible that the uptrend line from the massive triangle could offer plenty of support. In general, if we break above the shooting star from the Friday session, it opens up the possibility of a much bigger move to the upside. At that point, we would break above the $110 level, and go looking to reach the $115 level.

If we were to do the upward movement, then the market could continue the overall uptrend, which could therefore bring in even more momentum. Keep in mind that there are a lot of concerns about Russian oil, and that will be reflected in the market. The market breaking above the $115 level could send the market much higher, perhaps reaching as high as the $130 level.

If we were to turn around and break down below the uptrend line from the bottom of the triangle, then we could see this market break down to the $90 level. That being said, the market is more likely than not going to continue to see buyers on dips, as we have seen for quite some time. The “measured move” of the triangle could be back to the highs at $130, but I do not think it will make it there easily. It certainly looks as if we have seen a lot of upward pressure in the short term, so I think it is probably only a matter of time before the buyers overwhelm the entire situation. The US dollar strengthening could cause a little bit of downward pressure, but at the end of the day it is only a sideshow, so I think both could rise at the same time over the longer term.

Inflation tends to show up in energy rather quickly, so would not be a huge surprise to see this market rally and eventually break out.

The West Texas Intermediate Crude Oil market fell initially on Monday to reach down to the 50-day EMA. By doing so, it started to show that we are going to continue to pay close attention to this triangle that I have drawn, but I think it still has more of an upward bias to it at this juncture. Unfortunately, it is not just about supply and demand, but it is about rumors and speculation when it comes to headlines as well.

As long as there is a war in Ukraine and the sanctions that come with Russian oil, it is going to cause a lot of headaches. Germany has suggested that perhaps they are going to completely abandon Russian oil altogether, so that may have been what caused the turnaround in the middle of the session. The market falling to the 50-day EMA does make sense because you can see that it has been at least vaguely following the trajectory of that indicator. Keep in mind that in three of the last four days, the market has touched the 50-day EMA.

The Friday candlestick was the outlier in that situation, initially breaking through the triangle but giving back the gains to form a massive shooting star. While bearish, you can also make a strong argument that a lot of traders will not have wanted to carry risk heading into the weekend. Regardless, if we can break above the top of the shooting star from the Friday session, that would suggest that crude oil was about to go much higher.

Inflation tends to show up in energy rather quickly, so would not be a huge surprise to see this market rally and eventually break out. Furthermore, there is also the noise coming out of global demand. While the supply issues continue to be obvious, where people were not paying as much attention is the fact that some figures such as Chinese PMI have been falling through the floor. Yes, I realize they have a lockdown in China going on with a huge portion of the population, but that would only reiterate the demand slowdown argument. All you can do at this point is follow the charts. If we break that shooting star to the upside, you have to assume that we continue going higher.