US Dollar Weakness: EURUSD Surges and GBPUSD Stays Firm


  • A shift to a “risk off” mode through mid-May in reaction to US political turmoil, producing a broader US Dollar setback.
  • With EURUSD already signalling a more bullish tone after the first round of the French Presidential election vote above 1.0906, the recent surge driven primarily by US$ weakness leaves for further gains for the balance of May.
  • For GBPUSD, the sell-off in the greenback has yet to produce a more bullish tone, but threat is now for a push through psychological 1.3000 through mid-May and for higher targets.

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EURUSD – Rebound bias

A far more bullish tone Wednesday, surging up through 1.1045, 1.1090 and 1.1145 targets, sustaining the rebound from above the top of the bull gap at 1.0818, leaving risk higher for Thursday

Furthermore, the April push above 1.0906 signalled an intermediate-term bullish shift.

For Today:

l We see an upside bias through 1.1174; break here aims for 1.1200, maybe up towards 1.1245.

l But below 1.1100 opens risk down to 1.1061, maybe 1.1027.

Intermediate-term Outlook – Upside Risks:

l We see a positive tone with the bullish threat to 1.1300.

l Above here targets 1.1366, 1.1428/47, may be as high as 1.1616.

What Changes This? Below 1.0568 signals a neutral tone, only shifting negative below 1.0493.

4 Hour EURUSD Chart

EURUSD Chart

GBPUSD – Bullish threat

Another proud higher Wednesday above resistance at 1.2958, leaving a further rebound bias for Thursday.

Furthermore, the mid-April push above 1.2775 produced a multi-month Triple/ Quadruple Bottom pattern, which signalled an intermediate-term bullish shift.

For Today:

l We see an upside bias for 1.2989, potentially through 1.3000 towards 1.3058.

l But below 1.2904 opens risk down towards 1.2843/29, which we would look to try to hold.

Intermediate-term Outlook – Upside Risks:

l We see a positive tone with the bullish threat to 1.3000.

l Above here targets 1.3121 and 1.3455/3534 area.

What Changes This? Below 1.2363 signals a neutral tone, only shifting negative below 1.2107.

4 Hour GBPUSD Chart

GBPUSD Chart
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