EURUSD & GBPUSD Corrections Seem Over, Underlying Bull Themes Restarting

eurusd chart

  • The early February “risk off” scenario that has seen equity markets tumble and a flight to quality corrective rally in the US Dollar against most currencies (outside of the Yen), appears to be ending.
  • This has seen the EURUSD downside correction conclude and for a more positive recovery tone this week, re-energizing the intermediate-term bull trend.
  • For GBPUSD, a similar rebound effort sees risks higher through mid-February and for the second half of the month.

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EURUSD Bullish threats

A spike lower Wednesday on the US  CPI data to probe just below our 1.2290 support, but hold our better 1.2259 level (from 1.2275), but then a charge higher through resistances at 1.2392 ad 1.2435, building on the base we flagged Monday and keeping the bias to the upside for Thursday .

The end of 2017 push through 1.1961 saw an intermediate-term bullish shift to set an upside bias for January.

For Today:

  • We see an upside bias through 1.2473/75; break here aims for 1.2523 and the cycle high at 1.2538, maybe then 1.2555.
  • But below 1.2383 opens risk down to 1.2275, which we would look to try to hold.

Intermediate-term Outlook – Upside Risks:

  • Whilst above 1.2159, we see a positive tone with the bullish threat up to 1.2600, maybe towards 1.3000.

What Changes This? Below 1.2159 signals a neutral tone, only shifting negative below 1.1914.

Resistance and Support:

1.2473/75* 1.2523** 1.2538** 1.2570** 1.2600*
1.2383 1.2275** 1.2259** 1.2204** 1.2194

4 Hour EURUSD Chart

eurusd chart

GBPUSD Still an upside bias

A sell off through support at 1/3850 initially Wednesday on the US CPI data, but the a strong rebound from just above our 1.3795 support (from 1,3799),  for a still better rebound effort above 1.4006 resistance, further building on the base pattern that we had highlighted Monday, keeping risks to the upside Thursday .

The prior break above 1.3549 shifted the intermediate-term outlook from neutral to bullish.

For Today:

  • We see an upside bias for 14021; break here aims for 1.4067, maybe towards 1.4151.
  • But below 1.3940 targets 1.3848 and opens risk down to 1.3799/95.

Intermediate-term Outlook – Upside Risks:

  • We see a positive tone with the bullish threat back up to target 1.4465 and 1.4600.

What Changes This? Below 1.3730 signals a neutral tone, only shifting negative below 1.3456.

Resistance and Support:

1.4021 1.4067** 1.4151** 1.4228 1.4278/87**
1.3940 1.3848 1.3799/95** 1.3763 1.3740/30***

4 Hour GBPUSD Chart

 gbpusd chart

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