Daily Technical Round-up: Parliament chaos boosting sterling

Michael Baker, Thursday, 5 September 2019

Technical Analysis


Pivot: 1.2197

Scenario 1: Chaotic scenes in UK Parliament have given sterling a boost, the anti no-deal bill will become law. Cable has moved above the weekly pivot and the next target is the 50-day SMA and August highs between 1.2310/14. Any higher its the breakdown area between 1.2375/96.

Scenario 2: We have seen a bit of congestion around the 1.2211 area since late July and this is where we are hovering above today. The four-hour trend resistance has not convincingly broken, if we start to fall back below 1.2175 then look for a possible move back down to 1.2107/2076. The yearly lows could be on the cards if the fundamental pressures have not lifted.

Chart: The four-hour chart shows the one way direction we have seen. Cant imagine with what's going on in the UK that we have seen the end of the move, brief respite seen with the new anti-no-deal bill. Hovering around the four-hour trend resistance. 




Pivot: 1.1013

Scenario 1: Back above 1.0997 then we look for the weekly pivot and breakdown area between 1.1027/50. Fib levels come in at 23.6% at 1.1041 Yesterday's analysis and the high was 1.1041. Seen a small pullback, it's hard to see this going too much higher due to next week's ECB meeting. If we do then it's those fibs (38% @ 1.1112, 50% @ 1.1169 and 61.8% @ 1.12226) we focus on and the medium term four-hour trend resistance at 1.1132.

Scenario 2: 1.0996/1.0993 is a small congestion area, if we don't hold above there then we may look for the continuing trend to the downside. Daily sloping trend support briefly broken but we have pushed back above, another test comes in around 1.0952. 1.0922 is the yearly low, below is the 78.6% fib around 1.0813.

Chart: A lot of focus on next weeks ECB meeting. Four-hour chart showing the recent bounce but is this traders covering their shorts. 23.6% and weekly pivot combined stop any further push higher. 


Germany 30

Pivot: 12,004

Scenario 1: Moves higher continue as we pushed on to the 61.8% fib and touching distance of 12,191/296. This area seems the next target and there has been a lot of highs and lows here this year. It would not be surprising to see even more gains, there is a 73.6% fib @ 12,368, 29th July high @ 12,476 and a possible trend resistance of the highs at 12,495.

Scenario 2: 12,000 saw a pop through when there was initial resistance, we may see support here if we trade back lower. Pushes back below 11,800/861 will take the fizz out of this move higher. Weekly pivot just below the lower end at 11,794.

Chart: Equities are strong, four-hour chart shows the push above 61.8% fib. Markets have been strong lately, possible for a breather and then further gains?


Wall Street

Pivot: 26,273

Scenario 1: Yesterday saw the pop higher, taking out the 61.8% fib and 26,578 level. falling back lower but momentum is still to the upside. Look for further pushes higher and if we hold then its 26,652/726 and then the 78.6% at 26,909.

Scenario 2: Weekly lows are around the pivot which shows where the bulls are buying. Previous weekly pivots between 25,865/843, much stronger support between 25,715/626.

Chart: Four-hour chart showing a trend channel with the highs coming under attack. Market up to the breakdown area from the 1 August. 

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