Forex FOREX PRO WEEKLY, August 08 - 12, 2022

Sive Morten

Special Consultant to the FPA
Messages
16,700
Morning guys,

So, once again data release proves that it is tricky idea to gamble on its result. We will talk about CPI slowdown in our weekly report. Technically, EUR has short-term bullish context and we suggest that it should climb slightly higher.

Recently it hits daily resistance levels and OB:
eur_d_11_08_22.png


But now price has pulled back a bit and EUR still has not completed the OP at 1.0420. We suggest that should be the nearest target that could be finalized by butterfly pattern:
eur_4h_11_08_22.png


On 1H chart retracement could turn to AB-CD pattern to 1.02-1.0230 area, but we treat this way as less probable than just "V" shape retracement. Mostly because major pullback is done after COP and market now stands very close to OP target. Besides, 1.0265-1.0280 is K-area and natural support zone that together with strong bullish momentum should hold price on a way up.
eur_1h_11_08_22.png


Until completion of 1.0420 area we do not consider any short positions. If you intend to buy EUR, as usual, you could either wait for AB-CD pattern, or split position in part or buy right here with initial stop under 1.0220 Fib level.
 

Sive Morten

Special Consultant to the FPA
Messages
16,700
Greetings everybody,

So, EUR shows no progress by far, thus our scenario stands the same. Maybe it will form minor upside butterfly 1H chart to complete the target.

Today, I think, we could go back to GBP setup. There few important moments to mention. So, now it is clear that the CPI is the driver that could help GDP to complete the minimal target, at least - top between 2nd and 3rd Drives on the daily chart.

Retail broker chart (FX Choice) shows that we do not have any grabber, but CME Futures show that we do. This makes situation more reliable and gives confidence for long entry:
gbp_d_12_08_22.png


Here is our H&S pattern. Downside AB-CD to 1.19-1.1930 has been erased by CPI rally, so, with high degree of certainty we could say that right arm stands in place already. The target of H&S is 1.2535, far above 3-Drive target.
gbp_4h_12_08_22.png


It means that whatever target will be, we could consider K-support area and Agreement for potential long entry with stops either below major 5/8 Agreement or, what is more correct - below right arm's lows on 4H chart. At least initially. Entry inside the pennant is also possible, but stop level anyway remains the same. Thus, think, decide...
gbp_1h_12_08_22.png
 
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