May 07 2021 0
DXY had a relatively strong drop in the last session. That's something we should pay attention to.
- The number of requests for unemployment benefits of the US last week was lower than expected, reflecting the strong recovery.
- BoE kept the current interest rates in the last meeting.
- China has said it will suspend strategic economic dialogue with Australia, after it canceled some Chinese investments in Australia under the 'Belt and Road' initiative. China has sharply reduced Australian purchases of barley and coal, but has not cut back on its purchases of iron ore, the raw material needed to serve its infrastructure boom.
- Moderna, BioNTech was in trouble when the EU said it was willing to give up intellectual property rights over the Covid-19 vaccine.
The pennant pattern we mentioned in the previous session is showing signs of failure to form. However, the price is still being supported by the uptrend line so we still maintain a buy strategy. Consider buying when the price breaks above the 109.5 zone or when the price re-tests the 108.5 zone with bullish signals.
The price has failed to break the critical support zone 1.20 and bounced up sharply from this zone, retesting the 1.205 zone. This price action can influence the head and shoulders pattern formed earlier, with the possibility of creating a more obvious right shoulder. But it doesn't change our tactics anyway. Continue holding short positions and wait for additional opportunities when the price breaks down to the 1.20 zone.
Two events that were expected to drive volatility on the GBP were disappointing. The volatility is not enough to change the current situation. Prices are still stuck in a 1.380-1.400 range. We should continue to observe the situation and not trade with current conditions. Watch for price action at the 1.40 zone if the price approaches this zone.
Price had a breakout as expected. The target price area of 1.210-25 has also been approached. Consider exiting positions and moving SL to reduce risk. There is a possibility that corrections will appear around this price zone.
Price continued to recover and moved closer to the upper boundary of the range, around 0.78. We will continue to wait. In case the price succeeds in breaking out of this resistance zone, we can consider buying.