Greetings everyone!                                                     

The pound was the main troublemaker on Monday. After Boris Johnson resignation was confirmed, GBPUSD dropped 162 pips from the High to the Low of the session at 1.3188.

Looks like politics will be the main impact-factor for GBPUSD. Johnson was one of those who believed that Theresa May has a soft stance on Brexit negotiations. His resignation occurred amid Brexit talks, rumours are spreading about early parliamentary elections and the resignation of the Cabinet.

There is important news in the economic calendar today:

  • 11:30 a.m. MSK – UK statistics. May GDP, monthly and annual production in manufacturing;
  • 8 p.m. MSK – ECB member Sabine Lautenschläger speaks. We should pay attention to ECB members’ speeches, because they might comment on early increase of the interest rate. Last week EURUSD grew by 35 pips on a single rumour about it.

That is it with fundamental analysis – let’s get down to seeking Horizon X entries.

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Expecting a bounce from support on EURUSD

At the start of the week EURUSD grew, but couldn’t remain at the highs and pulled back to 1.1750. The downtrend may continue to 1.1700 – there is quite a strong support at 1.1700-1.1720, that we built using July 6 movement.

On Tuesday, bullish scenario is more likely. We will seek a swing pattern to form, with a possible false break of the support. The first long target is at 1.1729, I recommend applying the rule of Safe to this trade.

Seeking short trades after resistance bounce on GBPUSD

Yesterday the pound plunged, but started recovering in the evening. We should maintain bearish bias for today, but first an ascending correction must occur.

We can expect GBPUSD to approach yesterday highs. A swing pattern may form inside 1.3325-1.3362. If it happens, we enter a short trade with 1.3297 as our first target.

Considering yesterday reaction to that level, the bounce may be strong, so move part of the trade to no-loss. Close only half the trade at 1.3297.

Bullish scenario for USDJPY on Tuesday

We saw a surge in volatility on this pair, but today we can expect the market to calm down and the chart may move to the yesterday support. It is a condition for a long entry.

Yesterday the pair found support at 110.41-110.49, we need the price to reach this zone. A perfect scenario includes a W-pattern formation, followed by a false break of the support, and eventually we will get a perfect market entry.

We can take part of profit at 110.55. As the distance to the target is short, we can apply the rule of Safe to this trade.

Concerning yesterday, I want to highlight that it is unlikely that you would have traded momentum moves on GBPUSD and USDJPY. On USDJPY the move was strong and unexpected, nothing hinted to it. An M-pattern formed on GBPUSD high, but the chart couldn’t trend below properly after breaking the level. If you are trading only perfect entries, you should have avoided this one as well. 

There is nothing bad in it. If you traded using Horizon system for at least a couple of weeks, you have already realised that there is no lack of entries. You should simply learn the TS rules and trade only when you are certain of the entries – it is not as difficult as it seems. You can download the free basic system below.

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That is it with today’s analysis. The previous week was not plentiful concerning entries, let’s hope that this week we will have more trading opportunities.