Brief trading recommendations for EUR/USD and GBP/USD on 08/18/20

The EUR/USD currency pair has been following the rising course of the side channel 1.1700 // 1.1810 // 1.1910, (6 + 5 + 4, lines) for the fifth trading day, where there are only a few points left to the area of the upper boundary of 1.1910. A noteworthy point was that trend line No. 3 was taken as the slope angle, which served as the lower boundary of the ascending channel, until the sideways channel appeared.

In this situation, special attention is paid to line No. 4 (area 1.1910), since the subsequent price movement in the market will depend on whether the quote is consolidated higher or lower.

Based on the movement and location of trend lines, a number of market development scenarios can be predicted:

First, a rebound from line No. 4.

In this situation, the logical basis of the price rebound from line No. 4 (area 1.1910) is considered, as it has repeatedly happened in the history of the side channel 1.1700 // 1.1810 // 1.1910. The entry point for sell positions will be indicated under a number of circumstances; it can be a touchdown at the level of 1.1910, followed by a price rebound, or a price slowdown on one coordinate. The prospect of price development will be directed towards line No. 5 (area 1.1810) and line No. 6 (area 1.1700).

Second, the breakdown of line No. 4.

This moment will come sooner or later when the lateral channel 1.1700 // 1.1810 // 1.1910 is broken through. In this scenario, special attention is paid to the channel boundaries, in this case, there will be a risk of breakdown when approaching line No. 4 (area 1.1910). The entry point for a buy position is considered after a clear price consolidation above 1.1925, with the prospect of a move to 1.2000.

For the fourth day in a row, the GBP/USD currency pair has been concentrating within the midline of the side channel 1.2985 // 1.3085 // 1.3185 (# 6;5;4), with a variable deviation. The price never broke the boundaries of 1.3070/1.3145 which were set a day earlier, which indicates low market activity.

The concentration of trading forces within line No. 5 is a temporary phenomenon, the price movement towards line No. 4 or line No. 6 is likely to occur today.

Based on the looped price fluctuation within line 5, the recommendations from August 17 are still valid.

A scenario for market development :

First, price movement in the direction of line No. 4 (area of 1.3185).

In this case, the price movement is considered along the course 1.3145 -> 1.3185, where the second value reflects the upper boundary of the channel.

Second, price movement in the direction of line No. 6 (area of 1.2985).

In this case, the price movement is considered along the course 1.3070 -> 1.3000, where the second value reflects the area of the lower boundary of the channel.

Third, the breakdown of line No. 4 or No. 6.

In this case, we are talking about the completion of the amplitude of the side channel 1.2985 // 1.3085 // 1.3185, where the main strategy is aimed at identifying price fixing points outside a particular boundary, which will make it possible to predict the further course of the market.

The material has been provided by InstaForex Company - www.instaforex.com