Greetings, fellow traders!

The main event of Monday was the drop of the pound to the 1.5-year low. GBPUSD is very close to 1.2600 and may go further down. It all depends on the outcome of the Brexit voting that takes place on Tuesday.

Rumours spread earlier that May won’t convince the parliament to support her compromising agreement with the European commission, but today some experts believe that the voting may not take place at all. On Monday May discussed this issue with high-ranking officials, but no final answer was given. EU is not going to concede.

The possible outcomes are the following:

  • the voting is favourable and the pound grows;
  • the voting is unfavourable and GBPUSD drops further;
  • Voting is cancelled and a ‘no deal’ Brexit occurs – the pound drops;
  • A second Brexit referendum remains a possibility.

Tomorrow we will pay all attention to pound pairs. Aside from Brexit, you should also keep in mind the UK Average Earnings, it will be published at 4:30 a.m. EDT.

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That is all with fundamental analysis, let’s get down to Horizon X chart analysis.

Bearish pattern almost formed on EURNZD M1

On euro and kiwi cross a classical Horizon pattern #5 formed. Entry appeared after the chart broke out of the 1.6576-1.6581 swing zone down and retested the broken 1.6576 level.

It occurred at 9:11 a.m. EDT and you could enter the short trade. Your take-profit should have been at 1.6551. The price didn’t reach it yet but came very close. If you didn’t enter, you can try another time when the chart approaches the 1.6576.

Bearish pattern is forming on EURNZD M5

Profit on M1 chart is usually about 20 pips, M5 trades have larger potential. We are looking at pattern #5 which began forming at the week opening.

Both swing zones formed, the chart broke the one at 1.6611-1.6628 and all we need is wait until the chart tests the 1.6611 level and enter the market. The TP should be at 1.6536, you can earn around 70 pips.

Look for short trade on EURCHF

The key level for today is at 1.1293. It is the lower margin of pattern #5’s second swing zone. We should wait for the price to touch this mark and enter the market after that. We can place a delayed short order and a stop should be around 5-8 pips and placed above the nearest High.

The TP should be at 1.1284, the chart has already reached it but didn’t touch the 1.1293 mark before, which means that our bearish forecast is still active.

Expect Aussie to grow against the American

Bullish signal appeared on AUDUSD. It occurred after the chart moved above the 0.7197-0.7203 zone and tested the upper margin.

Horizon X rules state that you should exit the trade when the price touches the level. Your long trade take-profit should be at the nearest high – the target is at 0.7226.

AUDUSD is likely to test Friday highs on M15

At the end of last week, the chart tested the resistance at 0.7237-0.7241, but eventually swung. At this week opening, the chart may grow to this level and form a swing pattern after a break attempt.

The pattern structure contains two waves as the price attempts to break the resistance, formation of the swing level and another wave after the price tests the broken resistance. The swing level is likely to form at 0.7238.

You should place your TP at 0.7179.

Let me explain a few things about our analytics. The fact that forecasts negate each other on different timeframes (like on AUDUSD) is no mistake. They exist independently and you should trade them both.

On AUDUSD M5 a trade may end with a take-profit if a short pattern forms. This development does not contradict Horizon rules.

You can learn more about the trading strategy by completing training at Forex Academy. We study all patterns and pay particular attention to practice. You can acquire the basic training course to get to know some principles of Horizon trading. We only need your e-mail.

Get free basic Horizon X training course here

That is all for Tuesday. Wish you successful trading, you can ask questions in the comments.