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EURUSD shifts to an intermediate-term range; GBPUSD bear trend still at risk

EURUSD Chart 2018-09-03

  • On 22nd August when we last reviewed EURUSD and GBPUSD here we highlighted a negative turn in the US Dollar driven by a largely more “risk on” environment.
  • The extension of broader US$ strength into latter August has seen the EURUSD FX rate rally above notable technical resistance at1.1628, thereby shifting the intermediate-term outlook from bearish to a broader range theme (with risks into September skewed towards an intermediate-term bullish shift).
  • For the GBPUSD currency rate, the intermediate-term bear trend currently remains intact, having stalled exactly at the 1.3042 resistance level on the latter August recovery effort, but the risk remains towards neutralising the bear theme above this barrier into early September.

EURUSD

Downside risks

A more notable selloff on Friday after Thursday’s dip just below 1.1651 support, now through deeper and better support at 1.1593, to ease the positive tone from the rally from mid-August, to switch the bias lower for Monday.

The latter August push above 1.1628 neutralised the intermediate-term bear trend and set an intermediate-term range theme, seen as 1.1791 to 1.1300 (with risks skewed towards a bullish break above 1.1791).

For Today:

  • We see a downside bias for 1.1583; break here aims for 1.1528, maybe towards 1.1464.
  • But above 1.1655 opens risk up to 1.1690.

 Intermediate-term Range Breakout Parameters: Range seen as 1.1791 to 1.1300.

  • Upside Risks: Above 1791 sets a bull trend to aim for 1.1996/2000 and 1.2476.
  • Downside Risks: Below 1300 sees a bear trend to target 1.1134, 1.1000 and 1.0839.

Resistance and Support:

1.1655 1.1690 1.1733* 1.1746/51/60** 1.1791***
1.1583 1.1528 1.1464** 1.1393* 1.1355*

4 Hour Chart

EURUSD Chart 2018-09-03

GBPUSD

Downside correction bias

A setback late last week exactly from our key 1.3043 resistance and on Friday to push below 1.2973 initial support, to ease the positive tone from the last Wednesday’s surge through numerous resistances (1.2937, 1.2960 and 1.3000), to shift the bias lower for Monday.

The early May plunge through 1.3710 set an intermediate-term bear trend, BUT the risk is now for a push above 1.3043 for an intermediate-term shift to neutral and even above 1.3213 for an intermediate-term bullish shift.

For Today:

  • We see a downside bias for 1.2943; break here aims for 1.2904, maybe towards 1.2854.
  • But above 13007 opens risk up to key 1.3043; break here aims towards 1.3126.

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:

1.3007 1.3043*** 1.3126* 1.3173* 1.3213***
1.2943 1.2904 1.2844** 1.2827* 1.2797**

4 Hour Chart

GBPUSD Chart 2018-09-03

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