- 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
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
