The EURUSD has returned to test the 1.2845 level morning for a sixth time. The previous five times the price has declined to the mid and low 1.27s. The price has risen steadily since the open of the US trading session yesterday, moving from 1.2759 to reach 1.2841 moments ago. So far this week the range is between 1.2731 and 1.2841. Overnight Chinese GDP surprised markets coming in slightly higher than expected at 7.3% y/y giving a boost to risk appetite. In addition, Industrial Production increased by 8.0% versus expectations of a 7.5% increase, while Retail Sales were slightly lower than anticipated at 11.6% annual growth. This morning there is no EUR economic data and later in the afternoon US Existing Home Sales data will be released and could have an effect on the EURUSD. Tomorrow is the 30yr German Bond Auction and USD Core CPI in what will be a more eventful day than today in FX Markets.
At present the Euro is under pressure with the pair below 1.30 and still trading below the downtrend channel as seen in the H4. As long as the pair remains below 1.30 and below the downtrend channel, the bias remains bearish. - This has been the outlook for over a month now but the picture is a little more mixed as the pair has re-entered the lower end of the downtrend channel as seen in the H4 Chart. Overall the bias is still negative for the EURUSD although there is more hope for the bulls now due to the price action of the last two weeks.
EURUSD Support areas include 1.2700, 1.2600 1.2500, 1.2425, 1.2300. Resistance levels above are at 1.2845, 1.2800, 1.2900, 1.30 figure level, followed by 1.3165.
EURUSD 30 Min Chart
EURUSD 4 Hour Chart
EURUSD Pivot Table
The GBPUSD continued its recent uptrend moving up to the 1.6181 price area. Following an opening price this week of 1.6090 and a brief move lower to 1.6080 the price has moved only in one direction and that is up, adding 100 pips in the process. The price range this week is from 1.6080 -1.6181. The price has succeeded in exceeding the 1.6127 area mentioned as a key breakout out area. The next target above is at 1.6227, followed by 1.6253 and 1.6288. A failure to rise above the 1.6227 area will lead to a bearish Head and Shoulders pattern that could push the pair lower. The GBPUSD has rebounded from as low as 1.5875 earlier last week and is on a tear upwards. We discussed yesterday how the cable needs to hold firmly above the 1.6000 level to maintain a bullish bias and now the pair has put distance between itself and the 1.60 level. Having declined in 3 months from 1.7190 the pair has plenty of room to retrace higher. This morning UK Public Sector Borrowing increased to 11.1B which was worse than expected and later today the market is waiting for 10yr UK Bond Auction. Also, the US Existing Home Sales could impact the pair. While tomorrow the MPC Asset Purchase Facility Votes and the MPC Official Bank Rate Votes will be released for the GBP and US Core CPI in the USD, in what could be a day of fireworks in the pair.
The RSI on the 4 Hourly Chart had reached 66.5 at a price of 1.6113 and declined to 30.0 during move down to 1.5875. The pair then reacted perfectly to the indicator that indicated we were in oversold territory as it bounced higher during this 250 pip move. Now the RSI has returned and exceeded this level reaching 70 this morning and is in overbought territory. The pair has broken through and above the downtrend line drawn on the H4 Chart.
Support levels for GBPUSD can be seen at 1.6100, 1.6000, 1.5900, 1.5850, 1.5800, 1.5725, and 1.5650. Resistance to the upside at 1.6200, 1.6250, 1.6300, 1.6375, 1.6450, 1.6500.
GBPUSD 30 Minute Chart
GBPUSD 4 Hour Chart
GBPUSD Pivot Table