GBPUSD Remains Bearish Despite Bounce Risks; EURUSD Still Indecisive

EURUSD Chart 2018-07-23

  • In our last report here regarding the and UK Pound and the Euro published on 12th July we highlighted a GBPUSD intermediate-term bear trend and an indecisive range theme for EURUSD. These views have been reinforced by subsequent price activity.
  • GBPUSD remains a victim of ongoing political risk, still in the guise of Brexit and the fragile Conservative government, and despite a slightly weaker US$, this has seen a GBPUSD bearish trend extension into latter July, leaving the intermediate-term bear theme intact,
  • The aforementioned US Dollar setback from recent strength has seen EURUSD rebound back into the intermediate-term range environment, still defined by 1.1851 to 1.1509/07, with current risks shifting to the topside of this range.


Rebound rejects immediate bear bias

A solid rebound on Friday through 1.3083 resistance, that has eased bear pressures, building on Thursday’s intraday bounce from a new cycle low off of our 1.2956 target, flipping risks higher for Monday.

The early May plunge through 1.3710 set an intermediate-term bear trend.

For Today:

  • We see an upside bias for 1.3180, maybe then 1.3241; break here aims for 1.3293/3301.
  • But below 1.3040 opens risk down to 1.2956.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 1.2773,1.2587, 1.2363, maybe towards 1.2107.

  • What Changes This? Above 1.3473 shifts the intermediate-term outlook from bearish straight to bullish.

Resistance and Support:

1.3157 1.3180 1.3241 1.3293/3301** 1.3363*
1.3040 1.2956* 1.2911 1.2877 1.2831

4 Hour Chart

GBPUSD Chart 2018-07-23


Strong rebound sets upside bias

A surge higher Friday through 1.1693 resistance and this morning to prod above 1.1745, to build on Thursday’s setback and rebound (for a bullish Hammer patter), rejecting recent negative price action, switching risks back higher for Monday.

We see an intermediate-term range, 1.1851 to 1.1507, BUT with risk now easing for a bullish shift above 1.1851.

For Today:

  • We see an upside bias for 1.1760 and 1.1791; break here maybe aims for critical 1.1851.
  • But below 1.1640 opens risk down to 1.1574/60.

 Intermediate-term Range Breakout Parameters: Range seen as 1.1851 to 1.1507.

  • Upside Risks: Above 1.1851 sets a bull trend to aim for 1.2210, 1.2414/21 and 1.2529.
  • Downside Risks: Below 1.1507 sees a bear trend to target 1.1312 and 1.1134.

Resistance and Support:

1.1760* 1.1791** 1.1851*** 1.1903 1.1946
1.1640 1.1574/60 1.1526* 1.1509/07*** 1.1459

4 Hour Chart

EURUSD Chart 2018-07-23

Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.