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

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The EUR/USD currency pair did not manage to stay above the side channel 1.1700 // 1.1810 // 1.1910, (6 + 5 + 4, lines), after a short stagnation within the values of 1.1920/1.1965, the quote is rapidly declined below line No. 4 (area 1.1910).

The price return to the sideways channel from lines No. 4, 5 and 6 leads to the resumption of the rebound/breakout tactic relative to the preset lines.

Based on the recommendation in the previous review, we can see that there are already sell positions as soon as the price has consolidated below line No. 4 (1.1910 area). The prospect of the move is directed towards the middle line No. 5 (area 1.1810).

The subsequent development of the quote will depend on the behavior of the price relative to line No. 5 (area 1.1810), where two scenarios can be considered at once:

First, a rebound from line No. 5.

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

Second, the breakdown of line No. 5

Based on this scenario, line No. 5 (area 1.1810) will be broken, which will open the way for the development of a downward movement towards the lower border of the side channel line No. 6 (area 1.1700).

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The GBP/USD currency pair has followed the path of the European currency once again, where the quote quickly returned to the previous fluctuation after a short stay of the price above the side channel 1.2985 // 1.3085 // 1.3185 (No. 6; 5; 4).

It can be assumed that following the price within the boundaries of the side channel will become an actual trading tactic again, where, given the existing downward mood, movement towards the lower border of the channels, line No. 6 (area 1.2985 / 1.3000) is not excluded.

Moreover, alternative scenarios of the market development will be considered if the middle line No. 5 (area 1.3085) puts pressure on sellers and the quote is consolidated above 1.3120, which may give an opportunity for the price movement in the direction of line No. 4 (area 1.3185).

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