Wednesday, September 21, 2016

About Trendlines and Their Importance in Technical Analysis (Part 3)

Later today we can expect the announcement of the FED interest rate, as well as a speech from FED Chair Janet Yellen.

Although such news usually cause tension and the market volatility drops until it comes out, I want to share what I expect and what my positions are beforehand. I made my decisions based on important trendlines and the pin bars that formed on the four-hour time frames.

EUR/USD: I expect that the most traded currency pair will move in favour of the EUR. The pair is at a support level at 1.1123 and on the four-hour time frame there is a bullish pin bar. I expect a move to the upside, towards the resistance trendline that has been framing the figure that the pair has been forming since 8th August this year.

GBP/USD is also at an important support level (the red line). What is more, in the past 24 hours the pair formed a double bottom on the four-hour time frame, not to mention that the two bars there are bullish pin bars. I expect a move to the upside towards the resistance trendline (the blue line) around 1.2090 – 1.3100. Once the pair reaches that level I think there will be a renewal of the move to the downside.