Yesterday it was quite an interesting trading day for the European currency. After the pair dropped to a three-week low last Friday, Monday showed that the market has no desire to update the lows and move out of the wide sideway range 1.1270-1.1400. On Monday, we observed a technical reversal, when the market rebounded from support 1.1275 and strengthened to the area of 1.1360. Now the whole intrigue is whether the market has the strength to overcome the strong resistance 1.1360 / 1.1365, or whether the current upward momentum will be used by the market to boost sales. The nearest market support is located in the area 1.1335 / 1.1330 and further in the area of 1.1300. To open longs is now premature, we need to wait for the market to brake through mark 1.1365, as for shorts we are not considering this type of action at all. Also it is necessary to take into account the upcoming Fed meeting on Wednesday, which on the one hand is already taken into account by the market, on the other will affect the activity and the volatility of trading session.
Trading recommendations - longs after quotes consolidates above 1.1365
The weakness of the US dollar led to some recovery in the British currency. On Monday, GBP / USD approached the first resistance around 1.2660. It should be noted that a downtrend resistance line, an additional technical factor restraining the recovery of the market, supports this level. Of course, the British currency market is oversold, but one should not expect a recovery of this market under current conditions.
Trading recommendations - out of the market
During the Monday trading session, British currency was able to gain a foothold above the level of 0.7160, thereby confirming our expectations that the market intends to keep above this mark. Support in the 0.7200 zone, a possible overcoming of this mark, will send quotes to the 0.7240 area.
Trading recommendations – longs after fixing above 0.7200
Equities sale-off supported the gold market and helped the bulls overcome the 1241 mark. Gold is again at the maximum levels 1248. Now support is again in the 1243 area, long positions can only be considered after overcoming 1248 highs, or after rolling back to the first support zone of 1243.
Trading recommendations - buy in the area of 1243 and when consolidating above 1248