A strong rebound effort for EURUSD on Friday has signalled a shift from an intermediate-term bearish theme (evident since the UK Referendum on the EU, Brexit), to a broader range theme, but with a positive tone for early August.
However, GBPUSD has remained contained below resistance levels, which leaves a still bearish outlook for Cable (GBPUSD) into August.
An aggressive upside follow-through Friday, through 1.1120, 1.1165 and 1.1185/89 resistances to reinforce the aggressive bullish outside Wednesday pattern, to shift the bias back to the upside for Monday.
Furthermore, the push above 1.1189 has neutralised the aggressive plunge lower on Friday 24th June (after the UK Referendum result), to shift the intermediate-term outlook back to a neutral range theme.
Short/Intermediate-term Range Parameters: We see the range defined by 1.1426 and 1.0950.
Range Breakout Challenge
- Upside: Above 1.1426 aims higher for 1.1616 and 1.1714.
- Downside: Below 1.0950 sees risk lower for 1.0910, 1.0823/21, 1.0777/08 and maybe 1.0520.
- We see an upside bias for 1.1197; break here aims for 1.1231 and maybe then towards 1.1318.
- But below 1.1103 opens risk down to 1.1066/49.
Daily EURUSD Chart
An unexpected break higher above 1.3249 and 1.3291 resistances, but a stall back from ahead of 1.3315 (from 1.3302) to setback again Friday and to leave the risk lower Monday.
Short/ Intermediate-term Outlook – Downside Risks: The aggressive break lower in early July through, long-term chart support at 1.3045, psychological/ option level at 1.3000 and to probe long-term retrace support at 1.2797 reinforced the Brexit plunge lower on Friday 24th June, to leave the intermediate-term risks still lower
- We see a negative tone with the bearish threat to 1.2791.
- Below here targets 1.2565, 1.2000 and 1.1880 (risk to 1.1000 and 1.0520?!?!)
What Changes This? Above 1.4635 signals a neutral tone, only shifting positive above 1.5019.
- We see a downside bias for 1.3149; break here aims for 1.3070/57/47, maybe 1.2970.
- But above 1.3302 and 1.3315 opens risk up to 1.3384 and 1.3449.
Daily GBPUSD Chart