Summer Ranges Maybe Over Soon

It is no big secret that price action during summers tend to be range bound rather than trend driven. This summer was no exception. Major currencies as well as crosses were range bound. gbp/usd has been in 700 pip range (not a small one) since July, result of post Brexit consolidation after a huge collapse. As we have BOE coming out with interest rate decision tomorrow we may see the pair consolidate around 1.3100 area. Next week FED interest rate decision may send gbp/usd either back to support of 1.2800 or to 1.3500 and beyond that to 1.4000 or even 1.5000 level.

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eur/usd, on the other hand stayed in much smaller range of about 500 pips, July and August range being only 400 pips. After FED releases its’ interest rate decision the pair will most likely gain direction and either drop to 1.0500 or rise to 1.1700. The most likely scenario is that it will revisit the lows of 1.0500 before going upwards. A rare, but a possible case would be for the pair to keep dropping and reaching 2000 lows of 0.8200. That would have made a full bullish and bearish cycle of eur/usd. Seven years of rise and seven years of going back to the exact spot where Euro started its’ ascend.

If we look at the gold chart we can also see that it has been caged in a range for a number of months. One thing is clear that the commodity is in an uptrend after correcting downwards for a few years. At the moment, technical analysts and traders can spot a bullish flag forming on 8 hour and a daily chart, meaning that we may see a breakout upwards sooner rather than later.