Let’s begin today’s analysis with the GBPUSD chart. The dollar appreciation, worse-than-expected macroeconomic readings from the UK and the still unresolved situation with Brexit has exerted pressure on the GBPUSD currency pair. Looking at the weekly interval, the pair trades at the lowest level since the beginning of the year. Lower levels were observed only during the flash crash on 2nd January. Currently, the trend is downward and the reversal pattern, head and shoulders, observed earlier has already been invalidated. Currently there is a scope for declines to deepen further. The nearest support level can be found around the 1.2160 handle, where are the lows of 2016 and 2017 and the 127.2% Fibo level of this year’s surge can be found. As long as the trades below the resistance zone at 1.2700, any bigger upward correction looks questionable.
Source: xStation5
Let’s move to the S&P500 index (US500). Last week, we saw a break to fresh record highs. However, the market began to move lower later on. The price reversed back below the 3000 points handle and further declines may be on the cards. However, in order for a bigger sell-off take place, a break below the support zone marked by the 23.6% Fibo level of the latest upward impulse must occur. Local highs from April 2019 and September 2018 only strengthen the significance of the support zone. In case a break below occurs, one should look at the Fibo retracement levels as potential support levels. However, the direction in which the US stock market move will to a huge extent depend on what the FOMC minutes will show tomorrow.
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Source: xStation5In the case of the EURPLN currency pair, we can observe a clear rebound. The last W1 candle was the first bullish candle in 7 weeks. Despite a temporary drop below 4.2500 handle, the pair managed to break back above the key price zone and may be set to push even higher. Additionally, it should be noted that the last two downward waves (marked with green lines on the chart below) were of an equal range and, in turn, confirmed that the market geometry holds in this case.. Defending the level may lead to a return to the wider consolidation range in which the pair has traded since the second half of 2018. In fact, in order to talk about a trend, EURPLN would have to break above the upper limit of the range (4.3400), or below the lower ll (4.2500). As long as the price is in between, the sideways trend seems to be the base case scenario.
Source: xStation5This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
