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EURUSD Shifts Bearish as GBPUSD Bear Trend Re-Energises

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  • In our most recent report on EURUSD and GBPUSD we looked at the threat of an intermediate-term bearish shift for EURUSD and the ongoing bear trend for GBPUSD.
  • US Dollar strength alongside European currency weakness in August, due to Turkish contagion worries, has seen these themes reinforced.
  • The EURUSD early August failure back from resistances clustered between 1.1751 and 1.1791 and the plunge through the 1.1509/07 cycle and range lows has signalled an intermediate-term bearish shift.
  • For GBPUSD, renewed bearish activity since the early August Bank of England Meeting has seen a plunge through the prior cycle low at 1.2956 to reenergise the i0t bear trend.

 

 

EURUSD Plunge through key 1.1507 for intermediate-term bearish shift

An aggressive selloff on Friday through the critical cycle and range lows at 1.1509/07, to accelerate lower through various other modest supports, reinforcing the short-term bearish theme.

Furthermore, this bearish activity has shifted the intermediate-term view to bearish.

For Today:

  • We see a downside bias for 1.1386; break here aims for 1.1330 and a key level at 1.1312, maybe towards 1.1277.
  • But above 1.1472/82 targets 1.1537 and maybe aims for 1.1600.

 Intermediate-term Outlook – Downside Risks: We see a downside risk for 1.1312.

  • Lower targets would be 1.1134, 1.1000 and 1.0839
  • What Changes This? Above 1.1628 shifts the outlook back to neutral; above 1.1791 is needed for a bull theme.

Resistance and Support:

1.1472/82* 1.1537** 1.1600 1.1628*** 1.1656
1.1386 1.1330 1.1312** 1.1277 1.1233

4 Hour EURUSD Chart

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GBPUSD Bear theme extends

Another new cycle low on Friday through a notable support factor at 1.2773, to reinforce the prior August plunge through the 1.2956 cycle low (and since the selloff from the early August Bank of England rate hike), keeping risks lower Monday.

The early May plunge through 1.3710 set an intermediate-term bear trend.

For Today:

  • We see a downside bias for 1.2722; break here quickly aims for 1.2706/00 and 1.2676, maybe towards 1.2626 and even key 1.2589.
  • But above 1.2837 targets 1.2912 and aims for 1.2960.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 1.2589, 1.2366, maybe towards 1.2109.

  • What Changes This? Above 1.3213 shifts the intermediate-term outlook to neutral and only above 1.3363 to bullish.

Resistance and Support:

1.2837 1.2912** 1.2960* 1.3000* 1.3043***
1.2722 1.2706/00 1.2676* 1.2626 1.2589**

4 Hour GBPUSD Chart

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