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GBPUSD Send Bear Signals with EURUSD Slightly Negative

EURUSD chart 2019-05-16

  • We last looked at both the EURUSD and GBPUSD Forex rates on 6th May here and highlighted downside risks for EURUSD an upside bias for GBPUSD, the latter on hopes of a Brexit agreement between the Conservative and Labour parties.
  • The GBPUSD FX rate, however, has seen a significant breakdown through much of May, with little progress made on Brexit between the Conservative and Labour parties, with the recent push below 1.2864 support reinforcing intermediate-term bearish forces.
  • Separately, global financial markets have entered a significant “risk off” phase in May with notable selloffs for the major stock markets and averages, causing a strong rally for the Japanese Yen, as a safe haven (and selloff for “pro-risk” currencies like the Australian and New Zealand Dollars.
  • However, the EURUSD currency pair has been indecisive through this phase, with the Euro and US Dollar vying for position behind the Yen as a safe haven currency.
  • But the overall tone within the current erratic consolidation for EURUSD is slightly negative in the short-term.

GBPUSD bear trend reinforced

A more significant selloff Wednesday through the April ow as support at 1.2864, to reinforce Monday surrender of 1.2966 after last Friday’s rebound failure from below our 1.3081 resistance, to keep risks lower for Thursday.

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.

For Today:                                              

  • We see a downside bias for 1.2825; break here aims for key 1.2771, then 1.2743.
  • But above 1.2880 aims for 1.2916 and maybe opens risk up towards 1.2970.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 1.2771.

  • Lower targets would be 1.2437, 1.2366 and 1.2109
  • What Changes This? Above 1.3196 is needed to shift straight to a bull theme.

Resistance and Support:

1.2880 1.2916* 1.2970 1.3047 1.3081
1.2825 1.2771*** 1.2743 1.2704/00 1.2668**

4 Hour Chart

GBPUSD chart 2019-05-16

EURUSD bias stays lower

A Wednesday selloff through 1.1201 support to 1.1176 to reinforce a small top with the failure this week back from just below 1.1265 resistance (from 1.1264), to keep risks lower for Thursday.

The latter April plunge through 1.1175 set an intermediate-term bear trend.

For Today:

  • We see a downside bias through 1.1193; break here aims for 1.1176/65, maybe 1.1134.
  • But above 1.1244 aims for 1.1264/65 and maybe opens risk up towards 1.1302/04.

 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:

1.1244 1.1264/65* 1.1302/04 1.1324*** 1.1332/41
1.1193 1.1176/65 1.1134* 1.1109** 1.1081

4 Hour Chart

EURUSD chart 2019-05-16

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