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The EUR/USD currency pair has been developing within the blue channel (1 + 2 + 3) for a long time, but during the past day, market participants managed to change its slope from 26 to 55 degrees, presumably creating new trend lines along which the quote can move in the future (3 + 4 + 5, trend lines are green).
Following the path of trend lines, market participants know the direction of the quote in advance, as well as what can happen in the event of a breakdown or a rebound of the price relative to the specified lines.
Based on the analysis of price behavior relative to trend lines, it can be assumed that if line No. 6 plays the role of support, then the upward development will bring the quote to the next trend line No. 5 (area of 1.2000/1.2030). The most optimal point to enter buy positions is higher than 1.1910 and it reflects the local high on July 31st.
We have considered one of the possible scenarios for price development, but working with technical analysis, a trader has the opportunity to get alternative development scenarios. Now, we will consider them.
The change in the slope of the trend lines (from 26 to 55 degrees) could have a speculative character, which, as a result, could lead to a reverse price movement. In this case, consolidating the quote below the intersection of lines 1 and 6 (area 1.1840/1.1850) may resume the flow of short positions (sell deals), which will ultimately lead to the resumption of the move along the structure of trend lines 1 + 2 + 3. In this case, the development perspective is in the area of the 2 and 3 trend lines (1.1800 ---> 1.1730)
The GBP/USD currency pair has been moving along an ascending channel from trend lines 1, 2 and 3 for more than a month, where the pound sterling managed to strengthen in value by more than 800 points. The price movement from border # 3 has already brought the quoteto the area of line # 2, where it has an intersection of the trend line and the local maximum on July 31, which played the role of resistance in the market.
Based on the behavior of the price relative to the trend lines, the trader receives two possible options for the development of the market, I propose to consider them.
The first option comes from the resistance area of 1.3150/1.3170, which reflects the intersection of trend line # 2 and the local maximum on July 31. If the price consolidates below 1.3100, the sell positions will be confirmed, which will return the quote to the area of the trend line # 3 (area 1.3060/1.3070).
The second option is based on maintaining the upward mood of the market, where the quote, after a short fluctuation, manages to consolidate above the trend line No. 2 and the local maximum on July 31 (1.3150/1.3170), which leads to the opening of buy positions and the price movement towards the trend line No. 1 (area 1.3300).
The third variant of the market development proceeds from the first variant, where the return of the price to the trend line #3 leads to its breakdown and, as a result, a change in the direction of the channel from ascending to descending.
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