Brief trading recommendations for EUR/USD and GBP/USD on 09/22/20

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The EUR/USD pair, following the upper part of the side channel 1.1700 // 1.1810 // 1.1910, managed to overcome the average level (1.1810). As a result, there was an acceleration of short positions (sell positions), which led us to approach the level of 1.1755 for the fifth time.

The area of the price level of 1.1755 naturally puts pressure on market participants, where a slowdown occurs, followed by a rebound in the opposite direction.

Based on the data obtained on finding the quote and successive fluctuations, it is worth considering the price rebound from the level of 1.1755. At the same time, we should not miss the moment of considering the breakdown scenario. Nevertheless, the main border of the side channel is not the level of 1.1755, but the level of 1.1700.

Here are the possible market development scenarios:

First, a price rebound from the level of 1.1755.

We saw a natural slowdown in the price around 1.1755 on August 21, August 27, September 9, September 17 and September 21. This slowdown is already visible, but there is still no proper rebound. A rebound will only be considered in this scenario in the direction of the average channel level of 1.1810, in case of holding above 1.1780.

Second, the breakdown of the level of 1.1755.

It is unfortunate that everything is temporary. The trends change, levels break through, and the level of 1.1755 will be broken sooner or later. We should be prepared for this. Now, a price consolidation below 1.1730 with this slowdown will most likely indicate a breakdown of the level of 1.1755, in the direction of the main level of 1.1700.

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On the other hand, the GBP/USD pair showed high activity yesterday, where not only stagnation was broken within the level of 1.3000, the quote first rushed to the low (1.2864) on September 17 and then move all the way to the area of the main support - 1.2770. Thus, we got a full pullback of the downside interest relative to the recent corrective move 1.2770 ---> 1.3000.

In this situation, the area of the 1.2770 level was paid special attention to, since the following price movement will be clear depending on the behavior of participants within it. First of all, a natural rebound is considered, as it was in the previous period. At the same time, it is worthwhile to hedge and prepare for a further decline in case the level breaks down.

Here are the possible market development scenarios:

First, a price rebound from support level of 1.2770.

There is already a slight price pullback from the level of 1.2770. But in case of a full-fledged rebound, a movement in the direction of 1.2885 may occur.

Against this background, we will consider buying deals above 1.2825, in the direction of 1.2870-1.2885.

Second, the breakdown of the level of 1.2770.

The current pullback does not lead to a full-fledged price rebound, and the quote begins to accumulate within the range of 1.2770/1.2820. As a result, there was a price consolidation below 1.2770. The outlook of a downward development is possible in the direction of 1.2620.

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