Dec 21 2020 0
This week, there is a high possibility that price volatility will be low as Western countries start the year-end holiday, so liquidity is likely to be low. Watch out for unexpected votality in the market.
- The UK and the EU once again exceeded the deadline they set for themselves (Sunday) for Brexit negotiations.
- On Sunday, the UK stressed that the EU should more actively compromise to pave the way for a post-Brexit trade pact, attracting a quick response from the bloc's negotiators to protect their rights to protect their interests.
- The US Parliament will vote on the new stimulus bill on Sunday night (US time). This stimulus package is said to include live "checks" as well as an extension to unemployment benefits.
- Crude oil prices have cooled down a bit overnight, but the rise of the remaining industrial groups continued not to decline. Futures price reached 8,000 USD/ton on London floor, the highest level since January 2013.
- The latest data in the EU once again show that the economic impact of the latest blockade may not be as bad as feared, somewhat supporting the euro.
After the bear trap and a spinning top pattern, the price rebounded as expected and re-tested the 103.6 zone. I hope you have secured your positions in time. At the beginning of the week today we need to observe two resistance zones of 103.6 and 102.9 with two short term trading scenarios as follows: If the price breaks above, consider buying at 104.0 - 104.2. If the price breaks down below, consider sell at 102.4.
After approaching our first price target, at 1.225, selling pressure is reappearing. Anyone with long positions (which recommended to move Stop Loss before) should consider closing the positions. The down-gap at the beginning of the week, together with the hanging man candlestick pattern on the daily chart, is showing greater downside potential rather than continuing up. The first target for this downtrend/correction is around the 1.215 conversion.
After bearish signals around the 1.365 zone, the price pulled back sharply and broke through the first price target, around 1.345. The next goal is to fill the gap created last week. Those with short orders can move Stop Loss and keep the position. If not, consider entering new positions around 1.345 when there are clear signals.
The price did not break the range and continued falling as expected but moved up again, completing a double bottom pattern and showing signs of breaking the downtrend line. Previous short positions may have been stopped and we have abandoned this strategy as well. In the new session, we will focus on the area 1.28. If it breaks, it is likely that the price will continue to move up and soon approach the 1.290 - 1.295 level.
Thanks to the support of the positive fundamentals, the AUD retains its superiority (relative to other high beta currencies) against the dollar. Technically, the price retreated to the 0.758 conversion zone. Since selling pressure and bearish signals are not really worrying, we can still maintain our uptrend trading strategy. The next target is the 0.777 zone.