Jan 26 2021 0
Significant changes still appeared at the first session of the week. Most of the old tactics are still being maintained.
- In the first session of the week, weak EU economic data and complicated disease developments prompted many investors to return to the shelters, the USD held its position against the risky currencies.
- IFO's assessment is quite pessimistic about the German economy. If the stricter blockade orders last until Easter then there will inevitably be a double recession.
- President Joe Biden will take steps on Monday to tap into the purchasing power of the US government, the world's largest buyer, to increase domestic production and create a market for new technology.
The price is once again rejected by the downtrend line, creating a bearish pin bar candlestick. Although this increases the possibility of further declines, this is the 4th trend line test in less than 3 weeks, suggesting that selling pressure around this price zone has decreased. Recalling the old recommendation, temporarily exit existing short positions and observe the trend line closely. In case it is broken, the next resistance zone to watch out for is 104.4. Buyers should only consider buying when this price range is violated.
After creating the spinning top pattern, the price decreased slightly but did not continue going up. This price action is clarifying the price channel line. When looking at this channel on the big frame, it looks like a flag pattern - a model with a high probability of winning according to Thomas Bulkowski. Therefore, we need to pay attention to this pattern. The above signal is contradictory with the Double Bottom pattern forming around the 1.21 zone that we mentioned in the previous sessions, so we should only watch and wait for more confirmative signals to take action.
The price is still stuck around the 1.37 zone. The two boundary we observe has not been broken yet, so we keep waiting. At present, the 1.362 price zone has become more noticeable as the horizontal resistance has joined the short-term uptrend line. In case it is broken, it is likely that the price will move to the 1.35 zone. Conversely, if the upper band, the 1.375 zone, is broken, the target would be around 1.385-90.
Price has had a negative position signal around the downtrend line. In the short term, we expect prices to follow this signal. Reversal traders should consider exiting previous buy orders and add only buy orders in case the price successfully breaks the trend line and level 1.28, creating a new high.
The probing short orders around the 0.78 area are still profitable. Prices are still moving as expected. We continue to follow the old strategy. When the price breaks the 0.765-67 zone, we will consider adding short orders. In case the price breaks above the current channel line, we will temporarily abandon selling strategy.