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European Currencies Bear Correction Bias Versus US Dollar Into Mid-May

Technical Analysis

The US Dollar has signalled a positive correction tone against most G10 currencies since early May and the more recent losses for both the Euro and GB Pound vs. the USD leave risks for further correction weakness for these currencies into mid-May.

Although the very near term risks for both EURUSD and GBPUSD are lower, the intermediate-term outlooks remain positive (for now).

Read all technical analyses

EURUSD

A spike higher through the US Employment data, but a failure back from ahead of 1.1518/38 (from 1.1481) to reinforce the Wednesday breakdown through 1.1499/89, to set a bear tone for Monday.

For Today:

  • We see a downside bias for 1.1375/70; break here aims for 1.1346 and maybe 1.1294.
  • But above 1.1481 opens risk up to 1.1518/38.

Short/ Intermediate-term Outlook – Upside Risks: A strong rally through the 10/03 ECB Meeting through 1.1157 shifted the intermediate term outlook to bullish.

  • We see a positive tone with the bullish threat to 1.1714.
  • Above here targets 1.1871 and 1.2000.

What Changes This? Below 1.1213 signals a neutral tone, only shifting negative below 1.1142.

Daily EURUSD Chart

eurusd

GBPUSD

A negative consolidation tone Friday, a rebound failure back from ahead of 1.4572/75 resistance and a probe below 1.4441 support, to leaves a negative tone for Monday.

For Today:

  • We see a downside bias for 1.4401/00; break here aims for 1.4297/83.
  • But above 1.4500/05 opens risk up to 1.4572/75.

Short/ Intermediate-term Outlook – Upside Risks:

  • We see a positive tone with the bullish threat to 1.4816.
  • Above here targets 1.4945, 1.5000 and 1.5240.

What Changes This? Below 1.4089 signals a neutral tone, only shifting negative below 1.4004.

Daily GBPUSD Chart

gbpusd

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