FOREX CHART ANALYSIS AUG 18 -LET'S TRADE
- The People’s Bank of China (PBOC) decided to pump about $100 billion of liquidity into its money market through a 12-month loan program. Market watchers interpret the move as a sign that the PBOC is still prepared to loosen policy further in case the economic recovery stalled.
- President Trump at a press conference on Saturday said he was "considering" new measures against Chinese companies.
- Belarus President Alexander Lukashenko told protesters that they would have to kill him for new elections, a day after the Eastern nation witnessed its biggest rally ever demanding his resignation. EU foreign ministers, which refused to recognize election results during Friday's meeting, are calling for another emergency meeting on Wednesday.
- Euro remained flat despite optimistic monthly reports from Germany's Central Bank - Bundesbank.
Prices are having a third consecutive session with a relatively strong drop. The MA20 on the daily chart is being broken down and the price also returned to the previous decreasing channel. In addition, yesterday's decline also completed the rising wedge pattern. Therefore, anyone who trades following previous trend-line break signals should abandon buy orders.
A bearer can return to short positions. However, there is still a support area that determines the short-term trend structure. Since it has not been broken, we only place orders with small volume to probe. The MA20 will be a reasonable entry area. When the 105.5 zone is completely broken, we might consider adding positions.
EUR/USD has approached the upper boundary of the range. Since this range is relatively wide, people ranging from ranging may consider entering an order if there is a strong enough decrease signal. Note: do not enter orders too early to avoid false breaks hitting your Stop Loss. For the rest of us, we will continue to wait until the breakout signal is decided.
GBP/USD has the same price action as on EUR/USD but the range on this chart is relatively narrow (compared to volatility) so we should not act now but keep watching. Note that the longer this accumulation zone, the higher the possibility of an upward breakout.
The price respects the MA20 and did not go up to the upper boundary of the decreasing channel as expected. Instead, it is retesting the 1.32 bottom. We should not rush to enter the order and wait for the confirmation of breakout. Meanwhile, the target for short orders will be around 1.30.
The upper bound of the range has been approached. It has been continuously retested for a short time and has not seen any signs of selling again. The likelihood of a breakout is high; however, we should consider trading only when there is a signal. When the price breaks the range, the target will be around 0.735.