GBP/USD Daily Outlook
Daily Pivots: (S1) 1.3101; (P) 1.3157; (R1) 1.3202;
Intraday bias in GBP./USD is turned neutral with a temporary top in place at 1.3214. Rise from 1.2661 could still extend higher. But as it’s seen as a corrective move, upside should be limited by 1.3316 to bring near term reversal. On the downside, break of 1.3042 resistance turn support will argue that rebound from 1.2661 might be completed. In such case, intraday bias will be turned back to the downside for 1.2784 support to confirm.
In the bigger picture, whole medium term rebound from 1.1946 (2016 low) should have completed at 1.4376 already, after rejection from 55 month EMA (now at 1.4062). The structure and momentum of the fall from 1.4376 argues that it’s resuming long term down trend. And this will be the preferred case as long as 38.2% retracement of 1.4376 to 1.2661 at 1.3316 holds. However, firm break of 1.3316 would bring stronger rebound to 61.8% retracement at 1.3721. And, the eventual depth of the fall from 1.4376, and the chance of hitting 1.1946 low, will depend on the strength of the interim corrective rebound from 1.2661.
EUR/USD Daily Outlook
Daily Pivots: (S1) 1.1643; (P) 1.1680; (R1) 1.1709;
EUR/USD is still staying in range below 1.1733 and intraday bias remains neutral. Rebound from 1.1300 is seen as a corrective move. In case of another rise, upside should be limited by 38.2% retracement of 1.2555 to 1.1300 at 1.1779 to bring near term reversal. On the downside, break of 1.1617 minor support will turn bias back to the downside. Further break of 1.1525 support will indicate completion of this corrective rebound from 1.1300. However, firm break of 1.1779 will extend the rise to 100% projection of 1.1300 to 1.1733 from 1.1525 at 1.1958.
In the bigger picture, a medium term bottom should be in place at 1.1300, on bullish convergence condition in daily MACD and some consolidations would be seen. But still, note that EUR/USD was rejected by 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. That carries some long term bearish implications. Thus, we’d expect fall from 1.2555 high to resume after consolidation completes. Below 1.1300 should send EUR/USD through 61.8% retracement of 1.0339 to 1.2555 at 1.1186. And, in that case, EUR/USD would head to retest 1.0339 (2017 low).
