This is not a bad early in the week session at all. There are some new signals. Let’s check them out and apply the right forex trading strategy.
The pound slipped yesterday after it was reported that British Prime Minister Johnson was looking for a tough line on the British transition post-Brexit period, creating a new 'obstacle' in talks to Brussels.
German economy signaled worrying. IHS Markit's purchasing management data showed that the manufacturing index unexpectedly dropped to 43.4 in December, despite rising estimates by economists. This weakness has suppressed the growth of the service sector, narrowing the private sector economy for the fourth consecutive month.
Beijing warned that Berlin would face serious consequences if it excluded Huawei from building the nation's 5G network. The German side has yet to respond to this, but Chancellor Angela Merkel has so far shown she wants to stay away from the risk of confronting Germany's biggest trading partner despite warnings from her top security officers.
The price shows no signals of a reverse after a remarkable doji candlestick. We will stick to our opinion that we shouldn’t trade at this price. Instead, we will watch closely the two lines at the top and bottom. With the prediction that price is coming back to a rise, it can reach the upper line soon. Let’s wait for drop signals for this zone and then sell short.
The price still has a slight increase after strong falling signals last weekend. However, the situation still remains unchanged. We’ll stick to our view of a short-term fall for this pair. The selling point for today has been better.
As we have warned in the brokers review, we shouldn’t buy when the consolation phase is not complete. The price has dropped back to the 1.325 zone as expected. Now we wait for the current candle to close completely. If there are signs of a rise, we should buy. If there are no signs, let’s wait for the 1.310 zone.
The price has fallen to the 1.312 zone as expected but increased significantly afterwards, making a considerable signal on the daily chart. With this signal, we shouldn’t sell short anymore. Whoever trading reversal can consider buying when there’s a small consolation. The current target is the 1.320 zone.
The price has risen slightly after retesting the long-term falling trend. However, it continued to fall the next day. The situation today is no longer suitable for long positions because the MA20 line has been broken. The selling side came back right after the rise forcing the resistance zone to be tested constantly. Pay attention to the 0.687 zone. If it is broken, it is very likely to continue to fall.