The Pound was the largest mover on the day, losing 120 pips from the open. Given the bearish close, I do anticipate further losses in the days ahead.
But before we look at two GBP setups, I want to talk about CADJPY. The market recently broke below an important level at 94.0. This level had previously acted as resistance in May and June.
However since breaking through trend line resistance on June 20th the market has fallen back below this trend line and has now also broken key support at 94.0. I do expect for this area to now serve as resistance, however we’ll need to see bearish price action as confirmation.
Summary: Wait for a retest of 94.0 as resistance. Only a bearish pin bar at this level will signal a potential short entry. There is support around 93.55 but I’m more interested in the much stronger support level of 92.45.
GBPAUD has been trading within an equidistant channel since April of this year. Today’s break of channel support was preceded by multiple days of consolidation.
As I always say, most times when a market begins to consolidate along support or resistance like this it leads to an eventual break. Today was no exception.
Summary: The pair is currently sitting on minor support so I would expect a bounce of some sort. A bearish pin bar below channel support on the 4 hour or daily time frame would make for an ideal setup. Key support comes in at 1.783 and 1.774.
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