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This is one of our most popular articles and on a day like this it is worth showing again, for those who have not read it and as a reminder for those who have read it as well.
Here is a test: Check your emotions and see how a currency feels like it is trdoing when it is above/below the “50” level
eurusd 1,0850 (currently below)
gbpusd 1.2650 (currently above)
audusd .6650 (flirting with it)
My Favorite Trading Secret: The Power of the “50” Level
My Favorite Trading Secret: The Power of the “50” Level
GBPUSD 4 HOUR CHART – LOWER BUT LAGGING
GBPUSD is lower but lagging EURUSD as EURGBP slips.
You can see the importance of 1.2643 as there is a void of supports until 1.2575-85 on this chart. This also means there are no obvious stops to go after until that level.
This suggests using shorter time frame charts to trade this currency.
GBPUSD DAILY CHART –
GBPUSD tested 1.27, just shy of the key 1.2709 level but has since backed off.
tHE STRAIGHT LONE MOVE UP YESTERDAY LEAVES LITTLE IN THE WAY OF OBVIOUS SUPPORT SO EITHER LOOK AT SHORTER TIME FRAME CHARTS OR USE RETRACEMENT LEVELS.
In this regard, check out our FIBONACCI CALCULATOR and calculate FIBO levels for whatever time frame you are looking at, such as 4 hour chart
GBPUSD 15 MINUTE CHART – TRADING LESSON
You have seen me talk about the influence of cross on spot trading and this is how I look at it using EURGBP to illustrate:.
– When you see a straight line move down as in this chart (I look at the 15 min chart), it suggests there is a real money flow (order) driving, in this case, EURGBP lower.
– So you know GBPUSD is being bought and EURUSD is being sold.
= During this straight-line move, given the current trend, GBPUSD will be supported.
– Once EURGBP finds support, either GBPUSD will lose its strong bid or EURUSD will play catch-up.
– In this case, GBPUSD has lost its bid and slipped once the EURGBP bounced off its low.
If you ever played the game “Hot Potato” you can go with the flow until the music stops (i.e. order is filled)
Given how EURGBP is influencing EURUSD and GBPUSD, it seems like a good time to revisit this insightful article.
How You Can Use Currency Crosses to Trade Spot Forex
EURGBP 4 HOUR CHART – BACK BELOW .8600
If you trade EURIUSD and/or GBPUSD you need to keep an eye on EURGBP, which is trading lower today.
This, in turn, is helping to give GBPUSD a bid and so far keeping a lid on EURUSD.
Given the trends, the market is having more trouble absorbing the GBPUSD buy side.
EURUSD DAILY CHART – WATCHING A KEY TRENDLINE
EURUSD: technicals pointing up but so far just nicking its key daily trendline at 1.0831 without a clean break as it lags as it trades softer on various crosses (e.g. EURJPY, EURGBP). A firm break would expose 1.0884 as the next target.
Time now to roll the dice as US data is the next key focus.
GBPUSD 4 HOUR CHART – 1.25-1.26?
While the earlier fall-off-a-cliff move was unnerving, GBPUSD remains within 1.25-1.26, suggesting the 1.2550 level will dictate its intra-day bias.
As noted earlier, 1.2500-02 is a key level as there is qa voud below it.
On the upside, 1.2570-94 guards the key 1.2634 level.
GBPUSD 1-HOUR CHART – LOOKS LIKE IY FELL OFF A CLIFF?
I am using this chart as it looks like GBPUSD fell off a cliff. This may reflect a thin market that has been buying GBPUSD this week.
Whatever the case, the key level on the downside, as pointed out yesterday, is 1.2502 as there is a void of key levels below it. So far, GBPUSD has paused above it.
On the upside, back above 1.2546, at a minimum, would be needed to ease the risk on the downside.
EURGBP 4 HOUR CHART – Watch .8600
Looking at this chart, technicals are still pointed up but the range is .8581-.8619, with .8600 as the midpoint.
For me this suggests using .8600 as a barometer of GBP strength (relative term) or weakness.On the upside, a firm break above .8620 would put the major,8744 level in play.
On the downside, a firm break of .8580 would suggest the high is in for now and cooling pressure on GBPUSD.
Likely see support on dips while above .8581.
GBPUSD 4 HIUR CHART
Break off 1.2466 has so far been unable to reach 1.2422-40. The significance of these levels is below it would open the floodgates on the downside (major support is at 1.2298).
Otherwise, there are two pivotal levels
1.2500-05 on top
and
1.2450 (Power of 50 level) for intra-day trading bias (currently back above it)
As I noted, also loom at EURGBP as an indicator of GBP weakness or noit.
