Transcript of Video
From Forex Traders Daily, this is your daily analysis with Ross Mullins, live from Richmond, Virginia.
Hello everyone, this is today’s video analysis for July 6, 2018. Today we’re taking a look at the Greater British Pound versus the US Dollar [GBPUSD], but before I begin the analysis, very important for me to recognize the fact that in about 45 minutes from the recording of this video, we’ll have significant news out of the US. Jobs. NFP data coming out. We definitely want to pay attention to that because it could produce some significant volatility in the market. So, be careful about your trades prior to that news and then of course after the news, we’ll watch for potential trade setups.
We have two trends or two directions I want to talk about right now. First off, the black trend line here on the daily timeframe. Clearly it’s been in a downtrend for quite some time here for the GPBUSD, but it’s come to a significant slowdown down here at the bottom of the chart. So, it was significantly moving lower and slowed down, down here at the very bottom right of the chart.
In recent days, about a week or so, we could see the market rising along the short blue trend line. So, it was falling in the downtrend. Now it’s turning back higher in the short blue trend. The question of course is: will it continue to go up and turn into a new bullish trend or will it turn right back around after today’s US news and start working its way back lower again and challenge the historical lows that we see here for the GPBUSD?
We don’t know, so we’ll watch for trade setups that imply one of those two things. Let’s take a look at the orange-shaded area down there. I’m going to zoom in a little bit. Look back to the left. You see the blue circle showing support here. That gives us a clue to resistance. Look at all the price action. Support. Resistance. Buying. Selling happening around this orange-shaded area over the past two, three weeks. We’re looking at 1.3215, 1.3245.
Even the last three days having significant price action around this orange-shaded area. We saw the market try to get above yesterday and then suddenly turned back below the orange-shaded area. So, again, this is a significant area and we want to watch it today, especially on news. If we get poor news, if the news for the US comes out disappointing, not matching the forecast or better, then we may look for the breakout setup, where it finally pushes through the orange zone and starts working its way back towards the pink zone or higher in the direction of the blue rising short-term trend.
So, we’ll watch for that. Negative news for the US, we’ll look for the push above 1.3245. Targets back towards 1.3300 or higher for the GBPUSD. Now, if it comes out positive and the market interprets it as positive, we may see just the opposite. It finally pushes back under the orange zone, 1.3215, and begins a new journey towards the new lows back below or towards the blue zone. And below the blue zone, back towards the purple zone and the ultimate low down there at the very bottom of the chart. That would return to the bearish trend.
So, we’ll definitely watch for one of those two things. A push above the orange zone or reversal back below the orange zone and the blue trend line after our US news today.
Let’s take it down to the four-hour timeframe. It doesn’t really change it. It really gives us a zoomed in view of the price action we’ve seen over the past 24 hours or so. Take a look at this. It attempted to get above. Sudden infusion of sell orders. Big red candle here. Sudden infusion of sell orders. Came back up to 1.3245 and now pressuring back down again. So, it has not significantly broken above.
We’ve challenged. We’ve tested, but no singular candle body above to give us confidence that it’s going to go up. But we really haven’t seen it back below the orange zone either. It hasn’t been above. It hasn’t been below. It’s just been challenging both sides of this orange-shaded area for the past couple of days.
Now, I do like the fact that we are finding resistance here and the market has been unsuccessful at breaking it. If it stays like that and we get that positive sentiment after NFP, let’s look for the breakout scenario underneath 1.3215. Targeting back down to the blue zone. Positive movement for the USD. Something else to consider. Let’s just watch this dollar index as well.
We see it holding above 0.9390. Finding support here. If that continues to find support and goes up towards the yellow zone, if the dollar index rises after NFP, we’ll look for that GBPUSD to break this orange zone and go lower. That’s a positive movement for the USD, when the GBP goes lower.
So, definitely watching that. Of course if that same scenario happens, but it goes in the opposite direction, if this breaks the green zone, 0.9390 and goes lower to the orange zone, falling USD, we would look for the opposite here, where it breaks the orange zone and continues to the pink zone for the GBPUSD today.
From Forex Traders Daily, this has been your daily analysis with Ross. If you would like to get Ross’ analysis on all the currency pairs he’s watching and all the trades he takes today, join him in his live Trade Room by clicking on the link below. Please leave any comments you have about today’s video in the comment section below.