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Daily Technical Round-up: Markets spooked after Trump tweets?

Michael Baker, Monday, 5 August 2019

Technical Analysis

GBP/USD

Pivot: 1.2141

Scenario 1: Cable starts the week how it left off, under pressure. It seems focus has switched from FX over to the indices. Levels remain the same, looking back to 2016/17 between 1.2135/2082 we had multiple daily lows, with the 2017 low coming in at 1.1987 and the 2016 lows at 1.1777.

Scenario 2: Trading within a flag pattern since the 29 July. Back above 1.2180 then lets look for the break at 1.2213. Between 1.2213/2374 there was a period of rapid selling, will we see a quick unwind? 1.2396/77 is where we broke down last week with the weekly pivot just above at 1.2428.

Chart: Daily chart showing the push down to 30-month lows.

5 GBP

EUR/USD

Pivot: 1.1097

Scenario 1: Little bit of respite now? Looks like 1.1027 has held and we have pushed through the first are of resistance. next area of interest is the 1.1155/81 zone. There is a breakdown point from the 22 July at 1.1200 then there is 1.1281/88 which has held five daily highs, a break here we may push for the 200-day SMA at 1.1298.

Scenario 2: 1.1027 is the recent low, this sits above a previous breakout area at 1.1021. If we come under pressure we look at the sloping trend support at 1.0984. A break here could be significant with 1.0839/31 and 78.6% fib not much further.

Chart: Daily chart showing prices trending lower and a long-term trend support not too far off.

5 EUR

Germany 30

Pivot: 11,942

Scenario 1: Germany 30 a little on the back foot as we start the week risk-off. 38.2% under threat, this area sits back on that 2018 major support. Below 11,680 there is the 3 June low at 11,598 and then a market gap around 11,545. 50% fib at 11,452.

Scenario 2: We are in a strong support currently, equities have the tendency to bounce so do keep an eye on developments. If we can get back above 11,860 then the 12,000 level is where we have seen previous activity, this is below 12,053/106 and a potential 38.2% fib.

Chart: Daily chart showing the push down to the 38.2% fib which falls in a previous major support. Could we get a bounce from here?

5 DAX

Wall Street

Pivot: 26,476

Scenario 1: Equities under pressure, approaching a 50% fib which coincides with a large 23.6% around 26,041/019. 13 June low at 25,878 is where the lower support of a long-term trend channel comes into play.

Scenario 2: Bulls will want to get back some momentum, looking to get this back above 26,402/430. Between 26,576/714 there has been support and resistance and will be the next hurdle. From here we can target 27,000 and continue the rallies. Equity markets known for a large bounce, will we get this again?

Chart: Daily chart showing the push down to fib levels. President Trump's tweets last week on more tariffs have spooked the markets. 

5 Dow

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