Good afternoon, dear friends!
The significant events of Monday were the retail sales drop in the USA and an emerging hope that the hard Brexit will probably be avoided. As a result, the US dollar has weakened slightly against the pound. There was no strong drop against other currencies.
One of the reasons for the retail sales drop in the USA is the changes in the Tax Code adopted last year. Statistics showed a decrease of this indicator by 0.2% despite the expected growth of 0.3%.
But even under these conditions, the dollar is traded in the black against the euro by the end of the day. The euro is influenced by poor statistics on consumer price index.
Promising news were received from England. The Labor Party announced that it supports Common Market 2.0 amendments with respect to Brexit. Already this week an alternative to Theresa May’s plan might be adopted, which will make it possible to avoid the hard Brexit version.
To pay attention while working on Tuesday:
- 13:30 - business activity index in the UK construction sector;
- 17:30 - durable goods orders in the USA.
Let's go down to chart analysis and entry points search.
GBPUSD - expecting the upward movement to continue
The British performed well within the day and has strengthened against the US dollar. After America has opened, there was an attempt to move down, but a sharp rebound from the Low at 1.3080 took place, and an uncertainty zone of 1.3093-1.3101 was formed.
It has already been broken through upwards, and at the moment correction movement is taking place. We consider buying only upon touching 1.3101 level; place take profit at 1.3145 for these deals. The entry condition might be fulfilled at nighttime, so use pending orders not to miss profits.
EURGBP - getting adjusted from the area of daily lows
The pair has found the daily Low in the area of 0.8524. During the whole day, the British pound was strengthening against the euro, but after London got closed, a corrective upward movement has developed. Trading area between the levels of 0.8527 and 0.8531 is broken through upwards; waiting for the chart to touch the mark of 0.8531 from above.
This condition fulfillment will make it possible to open a deal to buy with a reference point for profit fixing at 0.8549. Place stop not higher than the level of 0.8523.
GBPCHF - waiting for the reversal pattern to work out
At the beginning of the week, the pound was growing relative to the Swiss franc as well. A reversal M-shape pattern was formed with a total minimum at 1.3117. The support has been broken through from the top down, and its retest has already taken place; one can open deals for sale.
Place stop for short positions at the mark of 1.3130 or higher (High of the pattern + margin of at least 4 points). Profit on short positions can be fixed at 1.3089.
GBPAUD - we've got conditions for sales
The situation is similar to the others involving the pound. The British was growing during the whole day, the daily high at 1.8477 was reached followed by the downward correction. The trading area was formed in the range of 1.8460-1.8473 and has already been tested from below; all the conditions for entering the market were fulfilled.
Open deals for sale with a target at 1.8421. Place stop at 1,8481.
CHFJPY - one can open long positions
As for this pair, bulls and bears were almost equal in force on Monday. A signal to buy was received after the chart has tested the level built on the total maximum of the reversal pattern. This is the standard entry point by Horizon X - a W-shaped pattern was formed, and the level was built through a local maximum between two troughs of the construction.
At the time the review was being prepared, touching the level of 111.45 has already taken place, which means that one can enter the market. Place TP for the deal at 111.55 and stop - behind the Low of the pattern, not higher than the 111.37 mark.
The M1 timeframe is quite risky, especially for the novices; one need to monitor the deals and fix profits on time. I recommend not to forget about the Safe rule, which enables us, in complicated situations, to exit the market with a small profit instead of the stop that have worked out. If you follow our analytics and deals' parsing for the week, you have probably paid attention that the deals are often closed by Safe. If you have been waiting until the last moment instead, the win rate would have significantly subsided.
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