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EURUSD Shifts Bullish; GBPUSD Just Stays Bearish

EURUSD

  • The EURUSD and GBPUSD currency pairs have rebounded in early June, with the intermediate-term outlook for the EURUSD FX shifting to bullish, whilst the GBPUSD Forex rate retains an intermediate-term bear trend (but under threat from recovery efforts).
  • This upside activity for both EURUSD and GBPUSD has primarily reflected a weakening of the US Dollar, which has been in reaction to heightened global trade concerns and a more dovish shift by the Federal Reserve.
  • Furthermore, the ECB have delivered a somewhat less dovish tone than anticipated in early June, helping the Euro higher.
  • But the Conservative Party leadership contest in the UK leaves risk for a “no deal” Brexit, which leaves Sterling vulnerable into June.

 

EURUSD intermediate-term bull shift

The early June push above the 1.1264/65 peaks set an intermediate-term, broader range seen as 1.1324 to 1.1106, BUT the Friday surge above 1.1324 now sets an intermediate-term bull trend.

Furthermore, this sets risks higher Monday.

For Today:

  • We see an upside bias for 1.1348; break here aims for 1.1390, maybe towards 1.1448.
  • But below 1.1306 opens risk down to 1.1250/43.

 Intermediate-term Outlook – Upside Risks: We see an upside risk for 1.1448 and 1.1570.

  • What Changes This? Below 1.1200 shifts the intermediate-term outlook back to neutral; through 1.1106 is needed for an intermediate-term bear theme.

4 Hour Chart

EUR/USD

 

GBPUSD intermediate-term bear trend, but immediate bias is higher 

A firm probe higher Friday above the 1.2744/51 resistances to build on Thursday’s dip and solid rebound from support built in the 1.2667/40 area, to reinforce the early June reversal above the down trend line from early May, to keep risks higher for Monday.

The latter April probe below 1.2947 signalled an intermediate-term Double Top pattern and set an intermediate-term bear trend.

For Today:                                              

  • We see an upside bias for 1.2763; break here aims for key 1.2814, maybe 1.2853.
  • But below 1.2700/2696 opens risk down to 1.2667/40.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 1.2437.

  • Lower targets would be 1.2366 and 1.2109
  • What Changes This? Above 1.2814 shifts the outlook back to neutral; above 1.3177 is needed for a bull theme.

Resistance and Support:

1.2763 1.2814** 1.2853 1.2880 1.2916
1.2700/2696 1.2667/40 1.2608 1.2558* 1.2513

4 Hour Chart

GBPUSD

 

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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