Last week was very interesting, as we ended the UK elections with a kind of second referendum on the realization of Brexit … finally!
Earlier in the week, the Fed decided to leave the same rates because of the approaching risks stemming from the uncertainty surrounding the U.S.-China trade deal. The result was a widespread weakness of the US dollar earlier in the week
We then moved on to the UK election, where the Conservative party, under the leadership of Boris Johnson, won a decisive victory. This caused the GBP to gain significantly.
Analysis: Price here started the week with side price shares until Wednesday’s FOMC press conference, where the Fed decided to keep rates the same. This caused a certain weakness of the dollar and pushed this pair upwards, breaking the upper limit of the range, making a valid upward push.
This momentum was followed by a relatively mute market, in anticipation of UK election results, which ended up increasing markets.
In general, we would consider an upward momentum of the mean daily interval to be valid, but an exception is made when a macroinformation event creates most of the movement. This was also followed by more than 65% rejection on the previous day’s rise.
As a result, we would trade this pair with an open bias that would happen in the last trading week of the year.
Analysis: Here, we had the market stall on a limited boost, in anticipation of the UK election.
After the victory of the great conservative party Boris Johnson, the pound soared against the dollar in the Asian session
As we discussed in the previous pair, an impulse driven solely by macro data cannot be considered a valid impulse. This is because, more often than not, the market is likely to reverse much of the movement or go to a side range for several days before continuing.
Therefore, we would like to see how this market continues to push in the same direction to validate a bullish bias.
Handling points: Upper – 1.3513 lower – 1.3227 and 1.3071
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GBp / jpy
Analysis: We have a similar situation here as the price went out of range after the UK election results.
Here, too, we will keep our bias open, as all the push was behind the election results. At the moment, we are negotiating price levels on both sides.
Handling points: Upper: 147.95 Lower: 143.50 and 142.35
usd / chf
Analysis: This market has remained limited for most of the last two weeks.
As a result, we would change an open bias this week, selecting only manipulation points at the extreme edges of the range.
Handling points: Upper: 0.9869 and 0.9917 and 1.0021 Lower: 0.9811
nzd / usd
Analysis: Like most U.S. dollar pairs, FOMC observations raised the price of that pair on Wednesday, pushing it upward.
However, unlike a few US dollar pairs, most of the rise was not created by publication and interest rate observations. Therefore, Wednesday’s push is considered a 1c push up.
However, with the main USD whipsaw following the results of the UK election, we are negotiating price levels on both sides to start the week.
Handling points: Upper: 0.6606 and 0.6632 lower: 0.6575 and 0.6523
usd / cad
Analysis: Here, the market will also start sideways and then sell on Wednesday after crude inventory numbers released on Wednesday.
This made a valid 1c pushed down, but was followed by two consecutive days of price side action.
Based on the DTFL strategy, our bias will be restored after two consecutive days of side action. Therefore, we would be looking to change the levels to both parts of the price of this pair that happened in the last trading week of the year.
Handling points: Upper: 1.3200 and 1.3267 and 1.3324 Lower: 1.3151
Reminders: At Day Trading Forex Live (DTFL), we have specific entry, exit and trade management rules that are used to trade these levels. You should not blindly enter the levels without first doing your own research and making sure you have a business plan in place.
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The post GBP wins amid big victories for Boris Johnsons ’Conservative party in the UK elections (December 16-20, 2019). first appeared in Day Forex Trading Live – Advanced Forex Trading Trading Strategies.
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