Brief trading recommendations for EUR/USD and GBP/USD on 08/07/20

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After a short movement within the green channel (4 + 5 + 6), the EUR/USD currency pair returned to the previous range from trend lines 1 and 2, where the conditional maximum, expressed in the area of 1.1900/1.1920, did not yield to the buyers' attack.

The absence of a clear breakdown of the 1.1900 1.1920 area leads to the formation of a flow of short positions (sell positions), which may lead to the price movement towards trend lines 2 and 3.

To optimize risks, it is advised not to rush to place sell trades until the breakdown of trend line # 2 (area of 1.1800), since we should not exclude a price rebound along the path 2 ---> 1, as shown in the chart below.

If the market participants still manage to consolidate below the level of 1.1800, then the chance of the price going down to the area of trend line # 3 (1.1730 / 1.1750) will be high.

An alternative development scenario will be considered in the event of a price rebound from trend line # 2, followed by a breakdown of the 1.1900/1.1920 high, which will lead to a movement in the 4 + 5 + 6 channel.

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The GBP/USD currency pair has been moving along an ascending channel from trend lines 1,2 and 3 for a long time, where the quote rebounded from the line No. 2 and headed towards line No. 3 during the previous day, thereby having a looped amplitude.

Based on the path of the price movement relative to the trend lines, it can be assumed that if line No. 3 (area 1.3100) plays the role of a support, and the quote manages to bounce off it and consolidated 1.3150, then the chance of touching the high of the previous day (1.3184) will be high.

An alternative scenario considers changes in the structure of the ascending channel (1 + 2 + 3), in case the price is consolidated below 1.3070, which will lead to a downward movement towards the psychological level of 1.3000.

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