Key Economic Data - Coming Up Today (All Times GMT+3)
The EURUSD declined yesterday from as high as 1.2845 and reached a low of 1.2706 before advancing to 1.2840 once more. The current price in the market is 1.2803 and the pair is holding towards the upper end of the explosive up candles that occurred on Wednesday. Technically the fact that the price is holding above 50% of the recent price move higher and more accurately around 75% from trough to peak creates a moderately bullish bias. On the other hand there is potentially a triple top formation at 1.2840-1.2845 whereby as long as the price holds below this level the setup could favor a downside move. Just below 1.2840, ie between 1.2820-1.2840 could offer favorable odds for put options on price declines. If the price breaks out above the triple top, seen in the 15 Minute Chart, this bias would turn aggressively bullish. Yesterday Crude Oil rose from $79.80 a barrel to $84.90 marking a 4.5% intraday increase from low to high and improving global risk appetite. The price of Crude Oil is considered by many observers to be a barometer of the health of the global economy.
Here we noted all this week starting from Monday the shift in momentum and in the price pattern of the Euro:
"This is a key week in the EURUSD after the pair managed to fight back from the 1.2500 level. Following a recent run of continual declines in the pair this rebound opens up the possibility of a change in trend. The EURUSD declined for 12 weeks in a row before posting an increase last week. Holding above 1.2500 is imperative in building an upside breakout. A break below 1.2500 will signal a continuation of the recent downtrend."
Also the line below has been included in this report every trading day for more than a month.
"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."
I choose to keep this sentence as it still applies. I would like to emphasize now that the outlook is more mixed. The pair has re-entered the lower area of the downtrend channel but remains below 1.30. In order to reverse the trend we will need to see more strength out of the EURUSD.
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
Pivot Point Table
The GBPUSD recovery has continued pushing the pair above 1.6115 and is now targeting a new one week high at 1.6126. The pair has rebounded from as low as 1.5875 earlier in the week and is poised to close the week firmly above the 1.6000 figure level. Today there is no further GBP economic data and no real significant data out of the UK until Wednesday next week, meaning the pair is more likely to trade on momentum and technicals rather than fundamentals relating to the GBP. Today there is housing data and consumer sentiment data to be released in the US and also Janet Yellen Fed Chair will be speaking at 12:30 GMT. Today is the last trading day of the week and it will be important to see where the pair closes.
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 to 62 and is approaching overbought territory.
Support levels for GBPUSD can be seen at 1.6000, 1.5900, 1.5850, 1.5800, 1.5725, 1.5650. Resistance to the upside at 1.6100, 1.6150, 1.6200, 1.6250, 1.6300, 1.6375.
GBPUSD 15 Minute Chart
GBPUSD 4 Hour Chart
Pivot Point Table