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The Euro and GB Pound both positive versus the USD for late January


Both the Euro the GB Pound have displayed a more positive recovery tone into latter January. For EURUSD, this activity has neutralised bearish pressures evident from Q4 2016, leaving risks for upside gains into late January and early February.

The EURUSD needs a push above 1.0874 for an intermediate term bullish shift. However, for GBPUSD, a recovery above 1.2432 is still required to neutralise intermediate-term bearish pressures. Only above 1.2775 signals a bullish shift on an intermediate term outlook.

EURUSD

A dip and a rebound again Friday, this time from 1.0623 (just ahead of our 1.0617 support), reinforcing the Thursday rebound from ahead of a stronger foundation at 1.0577/69 (from 1.0588), keeping the recovery theme intact for Monday.

Furthermore, the mid-January push above 1.0653/70 signalled an intermediate-term shift from bearish to neutral, whilst we also see growing Q1 threat for a push up through 1.0874, which would then shift the intermediate term outlook to bullish.

For Today:

  • We see an upside bias for 1.0720/30 to challenge 1.0760, maybe as high as 1.0805
  • But below 1.0623 opens risk down to 1.0588/69.

Short/ Intermediate-term Outlook – Downside Risks:

  • We see a negative tone with the bearish threat to parity (1.0000) and .9900, maybe as deep as .9610

What Changes This? Above 1.0670 signals a neutral tone, only shifting positive above 1.0874.

Daily EURUSD

eurusd chart

GBPUSD

Another strong rebound Friday from just ahead of our 1.2250 support (from 1.2257), reinforcing the bounce Thursday and the extremely aggressive rebound Tuesday (after Prime Minister May’s speech on Brexit), leaving risk for further gains Monday.

Although, the break last Wednesday below 1.2083 shifted the intermediate term outlook from neutral to bearish, risk is growing for a push back above 1.2432, which would see a shift back to a neutral range environment.

For Today:

  • We see an upside bias for 1.2415 and key 1.2432; break here aims for 1.2510, 1.2568, maybe 1.2605.
  • But below 1.2257/50 aims through 1.2210 and opens risk down to 1.2116.

Short/ Intermediate-term Outlook – Downside Risks:

  • We see a negative tone with the bearish threat to 1.1943 and 1.1880.
  • Below here targets 1.1500 and 1.1000.

What Changes This? Above 1.2432 signals a neutral tone, only shifting positive above 1.2775.

Daily GBPUSD Chart

gbpusd chart

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