GBP/USD: gravitate downwards or keep up?
Since July, the movement of GBP/USD has been contained between 1.27 and 1.34.
EUR/USD reminded about a slingshot strategy
Information is not investment advice
Thursday, January 23, was the day of the ECB meeting. The European Central Bank launched a broad review of its policy in order to redefine its main goal and how to achieve it. ECB President Christine Lagarde held a press conference and market players considered her comments dovish, i.e. negative for the EUR.
Central bank meetings, and the ECB meetings in particular, offer a chance to trade on the news. Such trading can be done with the help of many different strategies. One of them is the so-called “slingshot strategy”. According to our observations, this strategy tends to work especially well during the ECB meeting days. When we described this strategy in our Guidebook, we took as an example the euro's price action on December 8, 2016. The moves of EUR/USD, which took place yesterday, resemble that case a great deal. The obvious conclusion is that this strategy may be very helpful during the next meetings of the European regulator.
So, what’s the slingshot strategy for trading on the news?
Step 1. Open the H1 or M30 chart about 30 minutes ahead of the event and locate the nearest support and resistance levels.
Step 2. If the price then pierces one of this lines (in our example, the resistance), don’t buy on the breakout. Wait for the pair to return below the resistance. If it forms a spike upwards and then slips below the support, it’s a sell signal.
The next events that will drive EUR/USD are the releases of the European PMIs. Technically, the fix below 1.1040 will open the way down to 1.1000. Resistance is now at 1.1065 (100-day MA).
Elizabeth Belugina
Similar
GBP Gains Slightly Despite No Deal Uncertainty
UK officials are reportedly preparing to dilute PM Johnson’s Brexit legislation, in a move that could rekindle negotiations with the EU.
Sterling moves lower on political threats
EU's von der Leyen supports that EU team will go to London next week to 'intensify' negotiations
Popular
Gold’s rally may be limited
XAU/USD is edging higher, but may meet soon the strong resistance. What is the forecast?
EUR/USD skyrocketed ahead of ECB’s speech
The euro has started the week on a positive footing, surging to the key resistance of 1.1800.
GBP/USD: gravitate downwards or keep up?
Since July, the movement of GBP/USD has been contained between 1.27 and 1.34.
Choose your payment system
