- Back in our 14th March report here we highlighted a rebound threat for the EURUSD Forex rate and an erratic, but positive outlook for the GBPUSD currency pair.
- Forex markets have been extremely unpredictable since mid-March, with the Fed shifting to a still more dovish tone at their 20th March meeting, initially seeing US Dollar weakness, then a rebound for a more positive tone for the US currency.
- The EURUSD FX pair signalled an intermediate-term move to a bear trend earlier in March (after the European Central Bank Meeting plunge through 1.1214), but the more recent rebound through 1.1420 has seen a move back to a neutral, range theme again. Immediate risks, however, are back to the downside.
- For the GBPUSD FX rate, activity has remained extremely erratic through key Brexit votes in mid-Mach and now the likelihood of an extension to the Brexit process beyond the Article 50 date of 29th `March.
- A GBPUSD selloff and rebound from above our 1.2947 support though, has sustained an intermediate-term bullish theme.
EURUSD Risks stay lower
An aggressive selloff Friday through multiple supports as we had flagged in our last report, as low as 1.1276 (to 1.1272), to reinforce Thursday’s plunge that completely reversed Wednesday’s strong rally after the Fed Meeting, to keep risks lower for Monday.
The latter March surge post-Fed Meeting above 1.1420 set a broader range we see as 1.1509 to 1.1175, BUT with risks skewed towards an intermediate-term bullish shift through 1.1509.
- We see a downside bias for 1.1272 and 1.1248; break here aims towards 1.1213/11.
- But above 1.1341 opens risk up to 1.1390.
Intermediate-term Range Breakout Parameters: Range seen as 1.1509 to 1.1175.
- Upside Risks: Above 1.1509 sets a bull trend to aim for 1,1570/1.1621, 1.1815/52 and 1.1996/1.2000.
- Downside Risks: Below 1.1175 sees a bear trend to target 1.1119, 1.1000 and 1.0839.
Resistance and Support:
4 Hour EURUSD Chart
GBPUSD Bias remains higher
A dip and firm rebound Friday from just below our initial, modest support at 1.3087 (from 13079) to then push up through 1.3173 resistance, to build on Thursday’s rebound from a prod at the 1.3004 support level, from 1.3003, leaving the bias higher into Monday.
The aggressive, mid-March advance through the late February peak at 1.3350 switched the intermediate-term outlook to bullish.
- We see an upside bias for 1.3251; break here aims for1.3311 and 1.3331, maybe to the cycle high at 1.3381
- But below 1.3149 opens risk to 1.3079, maybe down towards 1.3004/03.
Intermediate-term Outlook – Upside Risks: We see an upside risk for 1.3473.
- Higher targets would be 1.3608 and 1.4000
- What Changes This? Below 1.2947 shifts the intermediate-term outlook straight to a bear theme.
Resistance and Support:
4 Hour GBPUSD Chart