Intra-day Trade Setup on EUR/USD & GBP/USD

Written by Abdul Rehman on August 14, 2013

Hello Forex Traders!

Today’s trading day will be accompanied by high impact news on the GBP during the early morning on the claimant count change, but also the votes on the MPC Asset Purchase Facility and Official Bank Rate. That could rock the boat, so I am not trading the GBP currency crosses until after release.

Technically speaking, the GBPUSD has reached and respected the 786 Fibonacci retracement level and has now fallen 150 pips. Are we in  down trend already? Difficult to say.

CABLE INTRA DAY ANALYSIS

Before we look into the intra-day analysis, these are the key points to consider from the higher time frames:

1)      The 4 hour chart has lower lows and lower highs

2)      However, the speed of the price action is at a shallow angle

3)      This indicates a more corrective type of behavior

4)      The 1.54 might provide support as it was a broken top in the very recent past, but the news event could easily send the Cable spiraling through support and resistance

5)      Day chart has higher highs and lower lows

The picture is at best mixed, with some bullish elements. Yet I would only seek to trade the upside above the 786 Fibonacci retracement level. And only to the 886 Fib, which is the next major resistance. The sudden move yesterday of 80 pips which got rejected by downside again leaving a wick on the top of the hourly candle is confirming the danger of opening a long with a long-term target (intra-day trade was still fine of course).

Speaking of intra-day… Let us take a look at today’s intra-day outlook for more guidance on today’s potential movements. The lower time frame of 1 hour has a bearish setup in my opinion with lots of resistance levels such as Fibs and Pivot Points around 1.5470.

Our Pivot Point indicator is providing the following information:

PP at 1.5461
R1 at 1.5496 / R2 at 1.5546 / R3 at 1.5581
S1 at 1.5411 / S2 at 1.5376 / S3 at 1.5326

The most interesting areas for today seem to be:

a)      above R1 at 1.55 up to the R2;

b)      and below S1 at 1.5410 down to S2.

EURUSD INTRA DAY ANALYSIS

Technically speaking the EURUSD broke the uptrend channel yesterday. That does not necessarily mean that all support has vanished of course. The 1.32 level could still prove to be a tough level for the bears. Let us zoom in! 

Our Pivot Point indicator is providing the following information:

PP at 1.3270
R1 at 1.3308 / R2 at 1.3354 / R3 at 1.3392
S1 at 1.3224 / S2 at 1.3186 / S3 at 1.3140

The best space for a downside trade is again between the S1 and S2.

I would not be looking for longs as any of the Fibonacci retracement levels could be a bouncing spot for more downside. Any move up has a high likelihood of meeting resistance and I want to avoid going long right in front of resistance. Upside back to resistance seems likely at the moment so that is why I am cautious with shorts at the current location.

Downside is only interesting however at the following spots:

1)      When the EURUSD makes a retracement back to the 382 or 500 Fib (white) and the currency shows price action signals that it is struggling at that level

2)      When the EURUSD breaks the bottom at 1.3230, the support has been cracked and a fall to the next support levels at 1.3190-1.32 is likely. In that area is a confluence of a -0.272 target and a S2 pivot point.

Did you look this intra-day analysis or do you prefer the long-term charts? What do you think of today’s potential? Let us now down below!!

Good Trading!!