FX.co ★ Brief trading recommendations for EUR/USD and GBP/USD on 08/13/20

The EUR/USD currency pair continues to follow the amplitude of the side channel 1.1700 // 1.1810 // 1.1910, (6 + 5 + 4, lines), where the concentration of trading forces fell once again at the average level of 1.1810 (line 5). The logical basis leads to a systematic deceleration within the level of 1.1810, as a result of which a reverse price movement may occur, where the tactic - "Work on a rebound" - will be relevant again.

Following the rebound tactics has repeatedly brought us profit, considering the recommendation from the previous day, you can see that the work on the rebound from the line no. 6 (area 1.1700/1.1720) returned the quote to the line no. 5 (area 1.1810), having a net income of 50-60 points.

Based on the current market situation, several scenarios of price development can be considered:

First, rebound from line no. 5

In this case, a logical basis is considered, where line no. 5 (area 1.1810) will play the role of resistance once again, setting the pace for sellers towards line No. 6 (area 1.1700). The entry point for a sell position is considered below the level of 1.1775.

Second, a breakdown of line no. 5

In this case, the cycle of fluctuations in the side channel 6 ---> 5 ---> 4 remains in the market, which leads to a breakdown of the 1.1810 line and sets the pace for buyers towards line no. 4 (1.1910 area). The entry point for a buy position is considered above the level of 1.1830.

Third, a breakdown of line no. 6

In this case, a downward rebound from line no. 5 (area 1.1810) not only lowers the quote to the area of line no. 6, but also consolidates the price below 1.1690. This market movement may well lead to a channel change from sideways to downward ones. The entry point for a sell position is considered below the level of 1.1690, with the prospect of development towards the values of 1.1650 - 1.1600 - 1.1550.

The GBP/USD currency pair is moving in the structure of the side channel of lines 4, 5 and 6 (1.2985 // 1.3085 // 1.3185), where, relative to the past days, there is a special concentration of trading forces in the tender part of the channel 1.2985 // 1.3085, resulting in variable amplitude.

Based on the analysis of the existing price dynamics relative to the given lines, several scenarios of market development can be considered:

First, a breakdown of line no. 5

In this case, we consider consolidating the price above the line 5 (area 1.3085), which leads to a shift of the amplitude from the lower part of the channel to its upper part 5-4.

The entry point to the buy position is considered above 1.3095, in the direction of 1.3130-1.3185.

Second, a breakdown of line no. 6

In this case, the cycle of fluctuations in the lower part of the channel 5-6 (1.3000/1.3085) leads to a price consolidation below 1.2985, which leads to a breakdown of line no. 6 and a change in the structure of the side channel to a downward one.