FX.co ★ Brief trading recommendations for EUR/USD and GBP/USD on 08/12/20

Recently, the EUR/USD currency pair changed its direction of movement from an upward to a sideways one, where the price levels 1.1700 // 1.1810 // 1.1910, (6 + 5 + 4, lines) are in the center of special attention. Based on the dynamics of the past day, it can be seen that the amplitude, where at first, there was a rebound in the price from the 1.1700 area in the direction of line 5 (area 1.1810), after which the plot was repeated, but in the opposite direction from line 5 towards line 6.

The existing fluctuation indicates that the number of sellers in the market prevails in comparison with buyers, and the return of the price to line 6 (1.1700 area) may signal a possible breakdown of the price value in the future.

Based on the above, we can consider two scenarios for the development of the market:

First, the breakdown of line No. 6

In this case, a given downward movement from line No. 5 (area 1.1810) can increase the chances of a breakdown of line No. 6 (area 1.1700), which will lead to a change in sideways movement (1.1700 // 1.1810 // 1.1910) to the downward trend towards the price levels 1.1650 - 1.1600 - 1.1550. The entry point for a sell position is considered below 1.1690

Second, a rebound from the line No. 6

In this case, a logical basis is considered, which stretches the entire route inside the side channel. The price area 1.1700/1.1720, after the variable bumpiness, still holds the quotes and fixes us above 1.1750, which will be considered a signal of a rebound with a movement towards line No. 5 (area 1.1810).

The GBP/USD currency pair is moving in the structure of the side channel of lines 4.5 and 6 (1.2985 // 1.3080 // 1.3185), where the quote showed high activity during the previous day, but still remained below line No. 5, which speaks of the predominant downward interest.

It can be assumed that in case of maintaining the given mood, we can see a full touch of line 6 (area 1.3000), where we should act according to a similar scenario as for the euro/dollar currency pair.

Scenarios:

First, the breakdown of line No. 6

In this case, a given downward move can push line No. 6 (area 1.3000), which will lead to a change in price movement from a sideways to a downward one, towards the price values 1.2900 - 1.2885 - 1.2770. The entry point for a sell position is considered below 1.2985.

Second, a rebound from the line No. 6

In this case, the logical basis of the lateral movement is considered, where after touching line No. 6 (area 1.2985/1.3000) a rebound occurs in the direction of line No. 5 (area 1.3080).