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EURUSD and GBPUSD intermediate-term bear trends

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  • Although the US Dollar strengthening theme that has been evident from mid-April has paused in the wake of US CPI data into mid-May, the underlying US$ bullish intermediate-term outlook remains intact.
  • In our article published in late April titled “GBPUSD bull trend questioned; EURUSD downside range risks”  we highlighted downside risks for GBPUSD and EURUSD.
  • The late April EURUSD plunge through 1.2153 signalled an intermediate-term bear trend.
  • For GPUSD, the early May selloff through 1.3710 completed an intermediate-term Double Top and intermediate-term bear trend.

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EURUSD Rebound fading

A less forceful advance Friday and stalling at the 1.1978 resistance level (after the strong rebound effort on Thursday to overcome initial 19.33 resistance), highlighting potential for a resumption of bear pressures from the earlier May significant selloff through the key swing low at 1.1914), shifting the bias back lower Monday.

The latter April plunge through 1.2153 set an intermediate-term bear trend.

For Today:

  • We see an downside bias for 1.1890/77; break here opens risk down to 1.1824
  • But above 1.1978 opens risk up to 1.2032/38.

Intermediate-term Outlook – Downside Risks: Whilst below 1.2245  we see a downside risk for 1.1914.

  • Lower targets would be 1.1716 and 1.1553.
  • What Changes This? Above 1.2245 shifts the outlook back to neutral; above 1.2414 is needed for a bull theme.

Resistance and Support:

1.197078* 1.2032/38* 1.2032/38* 1.2106* 1.2140
1.1890/77 1.1824* 1.1815* 1.1774 1.1735*

4 Hour EURUSD Chart

eurusd chart

GBPUSD Bearish theme intact

A lacklustre rebound Friday capped by 1.3618 resistance, leaving bear pressures from Thursday’s plunge through 1.3485/83 supports PLUS from the early May plunge through 1.3710 (that completed an intermediate-term Double Top), keeping risks lower Monday.

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

For Today:

  • We see a downside bias for 1.3500 and then to key 1.3459/56, maybe 1.3434.
  • But above 1.3618 targets 1.3666 and maybe aims at 1.3703.

 Intermediate-term Outlook – Downside Risks: We see a downside risk for 1.3456.

  • Lower targets would be 1.3302/00 and 1.3038
  • What Changes This? Above 1.3998 shifts the intermediate-term outlook from bearish back to bullish.

Resistance and Support:

1.3618* 1.3666 1.3703 1.3762* 1.3808**
1.3500 1.3459/56** 1.3434 1.3346* 1.3329

4 Hour GBPUSD Chart

gbpusd chart

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