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EURUSD and GBPUSD Intermediate-Term Bear Trend Being Questioned

eurusd chart

  • In our last EURUSD and GBPUSD report we highlighted the renewed  intermediate-term bear trend for EURUSD and the still extending bear theme for GBPUSD.
  • However, from mid-August the US Dollar has seen a negative turn, driven by easing Emerging Markets tensions, reduced global trade war threats and generally a more “risk on” environment”.
  • This has allowed for a rebound in both EURUSD and GBPUSD, not only easing the intermediate-term bearish themes, but also threatening to neutralise these trends, and to shift to more neutral, range environments.
  • Key levels to monitor to the upside will be 1.1628 for EURUSD and 1.3042 for GBPUSD.

 

EURUSD Upside threat

A push still higher Tuesday to prod 1.1600 resistance and build on Monday’s dip and a bounce from above initial support at 1.1372 (from 1.1393) and strong rally through 1.1472/82, to keep the bias higher Wednesday.

The August surrender of 1.1509/07 shifted the intermediate-term view to bearish, BUT risk is now for a move above 1.1628 to shift the intermediate-term outlook back to neutral.

For Today:

  • We see an upside bias for key 1.1628; break here aims for 1.1656 and maybe towards 1.1717.
  • But below 1.1511 aims for 1.1464 and opens risk down to 1. 393.

 Intermediate-term Outlook – Downside Risks: We see a downside risk for 1.1312.

  • Lower targets would be 1.1134, 1.1000 and 1.0839
  • What Changes This? Above 1.1628 shifts the outlook back to neutral; above 1.1791 is needed for a bull theme.

Resistance and Support:

1.1628*** 1.1656 1.1717 1.1746/51/60 1.1791***
1.1511 1.1464** 1.1393* 1.1355 1.1300**

4 Hour EURUSD Chart

eurusd chart

 

GBPUSD Upside risk

A strong rally Tuesday through the 1.2827/37 area and 1.2912 resistance to build on Monday’s late session rally above the down trend line from late June, keeping the bias for a correction still higher Wednesday.

The early May plunge through 1.3710 set an intermediate-term bear trend, BUT risk is now for a move above 1.3043 to shift the intermediate-term outlook back to neutral.

For Today:

  • We see an upside bias 1.2960; break here aims for 1.3000 and then key 1.3043.
  • But below 1.2844 aims for 1.2810 and opens risk down towards 1.2727.

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:

1.2960* 1.3000* 1.3043*** 1.3126* 1.3173*
1.2844 1.2810* 1.2727* 1.2696* 1.2661**

4 Hour GBPUSD Chart

 gbpusd chart

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