I think we’ll see continued upside in the EURUSD for the near-term. We saw price breakdown below the range it had been in last week (1), only to whip back up and close right up on the other side of the consolidation box I’ve drawn in (2). Price is now retesting the consolidation box, leaving two likely scenarios:
- If price manages a close above the area I have marked with the green arrows (1.1675 or so), I’m keen on longs back to 1.1740 and then possibly 1.1830.
- If price closes back inside the box, I would expect it to drift down to the lower bound. Probably be a messy move though, a short I will take.
The GBPCHF looks like it has downside coming up. I would like to see price closing below 1.3040 to confirm that she’s ready to go. My strategy then is straightforward – look for short-term bullishness, a dip in price and short away.
A break here opens up 1.2300, possibly even down to 1.1800.
Last week Thursday saw a big old bullish candle print on Cable. Does this suggest a reversal and some strength in the GBPUSD? For me, not yet. I would like to see price start closing above the recent swing highs to consider a bullish position. Price also appears to be capped by both of the trendlines I have drawn in. Conversely, a rejection of these trendlines sets up a very convincing short, as the trend is still certainly down.
The Aussie remains in a clear downtrend in my books. In fact, the level it’s at right now would be a beautiful place to look like a short. However, price seems a lot like it wants to go higher first. Why do I say that? Have a look at how Friday’s candle rocketed straight up to the level in question – hardly any pullback (hardly any evidence of sellers coming in). Price is just sitting there now, waiting to go higher. So let’s let it. My strategy is to wait for the bullish pop, then look for some weakness, perhaps on the daily or even 4-hour charts and load up a short position.