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EURUSD intermediate-term bullish shift with GBPUSD poised for similar

eurusd chart

  • A weakening of the US Dollar has been a theme across Forex markets in early 2019.
  • This has mainly been driven by a more dovish tone from Federal Reserve members since latter 2018, and in particular from the FOMC Chair, Jerome Powell into early January, reinforced Wednesday by the most recent FOMC Minutes.
  • The weakened US Dollar has seen the EURUSD currency pair recently surge through 1.1545 resistance, switching the intermediate-term outlook from neutral to bullish.
  • The GBPUSD rebound for early 2019 has positioned this FX rate to make a more positive technical statement in at least the short-term, as we go into a key Brexit phase in the UK Parliament.

 

EURUSD Intermediate-term bullish shift

We have stressed in recent reports to our Market Chartist clients in early 2019 that “erratic early 2019 price action leaves an intermediate-term range theme defined as 1.1545 to 1.1268/62, BUT NOW with risks skewed towards an intermediate-term bull shift above 1.1545” and the Wednesday surge to probe above 1.1545 sets an intermediate-term bull theme.

Furthermore, this price action above 1.1545 has built on Monday’s firm advance above 1.1434 resistance, to keep the immediate risks higher for Thursday.

For Today:

  • We see an upside bias for 1.1570/80/81; break here aims for key 1.1621/25 and maybe then 1.1685.
  • But below 1.1507 opens risk down to 1.1444 and 1.1421.

 Intermediate-term Outlook – Upside Risks: We see an upside risk for 1.1621.

  • Higher targets would be 1.1815 and 1.2000.
  • What Changes This? Below 1.1308 shifts the outlook back to neutral; through 1.1268/62 is needed for a bear theme.

Resistance and Support:

1.1570/80/81 1.1621/25** 1.1685 1.1720 1.1798*
1.1507 1.1444/21** 1.1392* 1.1344/36** 1.1308/1.1296**

4 Hour EURUSD Chart

eurusd chart

GBPUSD Risks stay higher

A firm rebound Wednesday from above the 1.2672/70 area, off of 1.2705, top probe above 1.2797 resistance, sustaining upside pressures from the Friday-Monday push above various resistances, to keep the bias higher Thursday.

The early December push through key 1.2694 support set an intermediate-term bear trend BUT risk is now for an intermediate-term shift to neutral above the key 1.2840/64 area and maybe to bullish above 1.2928.

For Today:

  • We see an upside bias for 1.2804/15; break here aims for the key 1.2840/64 area, then 1.2895 and maybe even towards critical 1.2928.
  • But below 1.2705 aims for 1.2672/70 and opens risk down to 1.2616, which we would look to try to hold.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 1.2366, 1.2109, 1.2000/1.1987 and 1.1950.

  • What Changes This? Above the 2840/64 resistance area shifts the outlook back to neutral; above 1.2928 is needed for a bull theme.

Resistance and Support:

1.2804/15** 1.2840/64*** 1.2895 1.2928*** 1.2994
1.2705 1.2672/70 1.2616** 1.2571 1.2513*

4 Hour GBPUSD Chart

gbpusd chart

 

Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.


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