Whipsaw activity for the US Dollar over the past week, and although the initial rally for EURUSD and sell off for USDJPY have set a more bearish US Dollar view for September, the corrections have already questioned this view. For Cable (GBPUSD) the breakdown has signalled a negative tone to a range environment and left a bias for a more bearish shift.
- A negative consolidation theme from midweek, turning into a more notable correction through support at 1.1394, 1.1290 and 1.1182 to leave the bias lower for Monday.
- However, the previous strong rally above 1.1436, 1.1534 and 1.1680 targets aims higher into early September.
- We see a downside bias for 1.1154/51; break here aims for 1.1110, maybe 1.1015, which we would look to try to hold.
- But above 1.1236 opens risk up to 1.1308.
Short/ Intermediate-term Outlook – Upside Risks:
- We see a positive tone with the bullish threat to 1.1714.
- Above here targets 1.1871, 1.2000 and 1.2254.
What Changes This? Below 1.1015 signals a neutral tone, only shifting negative below 1.0846.
Daily EURUSD Chart
- The plunge through 1.5422 support saw a shift to a broader range theme into early September with bias for a bearish shift below 1.5327.
- We see a downside bias for 1.5327; break here aims for 1.5285, maybe 1.5256.
- But above 1.5587 opens risk up to 1.5656.
Short/ Intermediate-term Range Parameters: We see the range defined by 1.5327 and 1.5819.
Range Breakout Challenge
- Upside: Above 1.5819 aims higher for 1.5930, 1.6000 and 1.6182/88.
- Downside: Below 1.5327 sees risk lower for 1.5256, 1.5189 and 1.5000.
Daily GBPUSD Chart
- An extremely aggressive sell off last Monday through multiple supports from 2015 (118.86, 118.14, 116.67), but a better rebound late last week leaves a positive tone for this Monday.
- However, the significant bear shift leaves a still bearish bias into September.
- We see an upside bias for 121.77 ; break here aims for 122.47, maybe 123.08, which we would look to try to cap.
- But below 120.62/48 opens risk down to 120.10, maybe 119.76, which we would look to try to hold.
Short/ Intermediate-term Outlook – Downside Risks:
- We see a more negative tone with the bearish threat to 116.14.
- Below here targets 115.57 and 113.86.
What Changes This? Above 125.28 signals a neutral tone, only shifting positive above 125.85.
Daily USDJPY Chart