Hello, fellow traders,
At the beginning of the week, an increase in demand for the American dollar is being observed. The main reason for the US currency strengthening is progress in trade talks between China and the United States.
Against this background, the EURUSD pair has dropped below the psychological level of 1.1000. There's every reason to expect the downward movement to continue and recent support at 1.0926 to be tested.
Recent statistics are not in favor of the euro: decline in business activity was recorded in the EU and Germany in particular.
As for the British pound, after testing the high at 1.2582 last week, the GBPUSD pair has been reaching the mark of 1.2421 on the momentum.
The situation is not really favorable for the British national currency. Amid trade talks with China, interest in the dollar is growing rapidly. As for the Brexit issue, there's nothing one might describe as actual progress, moreover, Boris Johnson made it clear that there will be no quick or simple solution to the land border issue with Northern Ireland. In addition, EU officials have rejected Boris Johnson’s claim that “a huge amount of progress” is being made in Brexit talks.
While trading on Monday, pay attention to the following:
- 14:45 CEST - business activity in the US;
- 16:00 CEST - speech by Mario Draghi.
Strong impulsive movements are not expected until the end of the day; however, Horizon X strategy regularly provides entry points with a probability of working out of more than 70%. You can learn more about this strategy if you choose to join our training. To see examples of the deals based on Horizon Pro strategy and sign up for the training, follow the link below.
EURUSD - downward movement might continue
On Monday, a sharp breakout of the support zone 1.0990-1.1014 took place, and the chart is consolidating under this area at the moment. Signals to enter the market have not yet been generated; two scenarios are considered:
- return to the previously broken out range, formation of the trading zone, and continuation of the movement up to resistance at 1.1086, following consolidation above the trading zone;
- high probability of downward movement continuation up to the support at 1.0926. One can open trades for sale after the extension is formed within the range 1,0990-1,1014.
AUDUSD - only buying is considered
As for this pair, there's no strong dropping observed so far, yet we expect that the Australian dollar will move down up to support at 0.6700 in the nearest future. Make sure to carefully monitor chart's behavior in the range of 0.6686-0.6728. Within this area, a reversal construction may be formed on M15 timeframe, and growth up to resistance at 0.6852 might take place; place take-profit here.
Scenarios implying breakout of support 0.6686-0.6728 and resistance 0.6853-0.6894 ranges are not considered at the moment.
USDCAD - bearish reversal is expected
The direction of chart's movement remains undetermined. Bulls cannot get higher than 1.3300, and bears don't manage to get over support for 1.3240-1.3250. The scenario implies that buyers will finally be able to consolidate beyond the level 1.3300 for some short period of time, and a reversal pattern will be formed within the range 1.3332-1.3382.
As soon as reversal construction is confirmed, one can enter the market with take-profit located at 1.3183.
USDCHF - bullish signal is expected to generate within the range 0.9853-0.9879
Significant strengthening of the franc is not expected to take place in the nearest future. The closest support is located within the range 0.9853-0.9879; here a reversal construction may be formed.
In case this scenario is executed, fix profit at the lower border of the resistance zone 0.9956-0.9982.
If a sharp breakout of one of the zones takes place, do not enter the market.