Forex FOREX PRO WEEKLY, July 27 - 31, 2020

Joshnix

Corporal
Messages
100
Chart copy paste
Are investors losing faith in the U.S. Dollar? King$ is attempting to break 9-year rising support at (2)
I don't think it is losing faith but there has to be consequences to the continuous printing Jerome is doing. So Dollar isn't crashing but it may start a long term downtrend until the virus is over and we start to tighten policy again.
 

Sive Morten

Special Consultant to the FPA
Messages
13,834
Morning everybody,

Today we mostly have tactic discussion on EUR as overall price action is not strong. As you know, and we talked about it every day - EUR is strongly overbought on weekly chart. Besides, next weekly major Fib level stands around 1.1870 - very close to current price level:
eur_w_30_07_20.png


Theoretically, EUR should have start retracement once is has hit daily target around 1.1760, but recent dovish Fed comments pushed dollar lower and that doesn't let EUR to start the pullback. Now the major question is - whether EUR will creep to 1.1870 and also hit minor daily AB-CD target as well, or start dropping immediately. For daily traders - it changes nothing, as anyway we consider only long positions now and do not intend to trade EUR down. But for scalpers it could make sense:
eur_d_30_07_20.png


On 1H chart we have first hints on retracement, but they are not sufficient yet for position taking. Butterfly and MACD divergence are good but we do not have the major thing - breaking of HH and HL tendency. We need Lower lows and downside reversal swing to start thinking about the pullback. Let's keep watching for GDP releases today, maybe it will be more clarity by the end of the session:
eur_1h_30_07_20.png
 

Joshnix

Corporal
Messages
100
Curious if could reason the Pound not paying attention to overbought at month end for us briefly. Could it have to do with the Monthly candle of March? are we trying to escape it's range like Gold did?
 

Sive Morten

Special Consultant to the FPA
Messages
13,834
Is that can be considered confirmed DRPO in GBP/AUD weekly chart?
Hi mate,
well for me it doesn't look like accurate DRPO, mostly like sideways action before continuation. For DRPO we need to get clear tops or bottoms, when second bottom is failure attempt to go lower. On your chart market has not formed any action of this sort.
 

Sive Morten

Special Consultant to the FPA
Messages
13,834
Curious if could reason the Pound not paying attention to overbought at month end for us briefly. Could it have to do with the Monthly candle of March? are we trying to escape it's range like Gold did?
Yes, Josh.
USD is very weak now, 30%+ collapse in GDP, awful situation inside the country. No technical factors could overweight this. It seems that we should be ready for the same action as on EUR - right to weekly 1.3243 Fib resistance and Agreement with daily OP...
 

Sive Morten

Special Consultant to the FPA
Messages
13,834
Morning guys,

US shows awful statistics yesterday. Fundamental factors are so strong that they overcome any common sense of technical tools that we use and torture them. This is not result of GBP or EUR strength, but weakness of USD first of all.
Thus, situation on GBP and EUR now is very similar - as former as latter are coming to next 5/8 weekly Fib resistance level. Both are overbought (EUR is stronger), both have an Agreement at these levels:
gbp_w_31_07_20.png


On daily chart of GBP price ignores 1.27 extension of butterfly and comes to 1.618 level. At the same time, our major OP is also stands very close and GBP could make an effort to reach it as well. Thus, our journey to OP that was seemed as long - term is appearing to be short-term instead.
gbp_d_31_07_20.png


ON 4H chart GBP is coming to butterfly's inner AB-CD pattern with XOP at the same level as 1.618 butterfly extension.
gbp_4h_31_07_20.png


Following to common sense and probabilities, market has to show reaction on strong resistance, especially with O.Bought on the back. Sometimes happens that fundamentals are very strong and you're waiting and waiting for pullback, but it doesn't come. Well, maybe now we have the same case. But you have to make your personal choice. I feel uncomfortable to buy at this situation and prefer to wait.
Thus, we expect some downside reaction on the market to 1.32-1.3270 level...
 
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