- On 16th May we last reviewed the GBPUSD and EURUSD currency pairs here and highlighted a bearish theme for GBPUSD and downside risks for EURUSD (with an erratic consolidation phase).
- The Pound has subsequently continued on its downward path with the announcement that Theresa May will step down as Prime Minister in early June, sparking a leadership contest within the Conservative party.
- This has seen the GBPUSD Forex rate push through a key support at 1.2668, reinforcing both the short- and intermediate-term bear trends.
- The EURUSD FX rate been very erratic in the second half of May, plunging lower as we had expected just through 1.1109 to a new multi-year low at 1.1109 for a more bearish intermediate-term outlook, but then a firm rebound for an short-term upside bias, leaving a somewhat indecisive tone into late May.
GBPUSD bear pressures intact
A Monday selloff from new 1.2751 resistance to reject Friday’s rebound up through 1.2719 resistance to sustain bear forces from Wednesday’s selloff through key 1.2668 support, to keep immediate risks lower for Tuesday.
The latter April probe below 1.2947 signalled an intermediate-term Double Top pattern and set an intermediate-term bear trend, BUT risk is now for a break above 1.3196 for an intermediate-term bull shift.
- We see a downside bias for 1.2646; break here aims for 1.2603, maybe 1.2571.
- But above 1.2719 opens risk up to 1.2751, maybe 1.2814.
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 1.3047 shifts the outlook back to neutral; above 1.3177 is needed for a bull theme.
Resistance and Support:
4 Hour GBPUSD Chart
EURUSD bias switches higher
A push higher Friday-Monday through 1.1184/88 resistances to build on Thursday’s very erratic tone that saw initial selloff to just prod to a new multi-month cycle low through 1.1109 (to 1.1106) then a very strong rebound, flipping risks higher for Tuesday.
The latter April plunge through 1.1175 set an intermediate-term bear trend.
- We see an upside bias for 1.1215; break here quickly aims for 1.1224, maybe 1.1244.
- But below 1.1175/71 opens risk down to 1.1143/40, maybe 1.1106
Intermediate-term Outlook – Downside Risks: We see a downside risk for 1.1109.
- Lower targets would be 1.1000 and 1.0839.
- What Changes This? Above 1.1324 shifts the intermediate-term outlook straight to a bull theme.
Resistance and Support:
4 Hour EURUSD Chart