GBPUSD bearish but rebound risks; EURUSD very erratic in a range

Steve Miley

  • In our last report here on December 3rd we indicated downside risks for GBPUSD and EURUSD.
  • The early 2019 “flash crash” driven selloff for GBPUSD reinforced the intermediate-term bearish theme, BUT the subsequent rebound now leaves the bias for a shift back to a neutral intermediate-term view (onlt through above the key 1.2840/64 area).
  • The EURUSD FX rate produced a brief intermediate-term bull signal above 1.1500 to start 2019, but the subsequent selloff has resumed an erratic, range theme (seen as 1.1545 to 1.1268/62).

GBPUSD Risks shift higher

Another firm rebound Friday through various resistances to build on Thursday’s push above 1.2616, rejecting negative forces from the early 2019 plunge through the cycle low at 1.2476, to shift the bias higher for Monday.

The early December push through key 1.2694 support set an intermediate-term bear trend.

For Today:

  • We see an upside bias for 1.2745 and 1.2773; break here aims for 1.12815 and the key 1.2840/64 area.
  • But below 1.2672/70 opens risk down to 1.2616 and maybe 1.2571.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 1.2366, 1.2109, 1.2000/1.1987 and 1.1950.

  • What Changes This? Above the 2840/64 resistance area shifts the outlook back to neutral; above 1.2928 is needed for a bull theme.

Resistance and Support:

1.2745 1.2773** 1.2815** 1.2840/64*** 1.2895
1.2672/70 1.2616** 1.2571 1.2513* 1.2474

4 Hour GBPUSD Chart

gbpusd chart

EURUSD Still erratic, bias just lower

A spike lower Friday and another erratic tone to further underscore the very indecisive theme from late 2018, after the head fake up to 1.1545 at the start of 2019 and subsequent aggressive selloff to 1.1308, but whilst below 1.1434 we still see a negative bias for Monday.

Erratic early 2019 price action leaves an intermediate-term range theme defined as 1.1545 to 1.1268/62, BUT with risks skewed towards an intermediate-term bear shift below 1.1268/62.

For Today:

  • We see a downside bias for 1.1382/80 and 1.1344/36; break here aims for 1.1308 and 1.1296, maybe key 1268/62.
  • But above 1.1434 opens risk up to 1.1497.

 Intermediate-term Range Breakout Parameters: Range seen as 1.1545 to 1.1268/62.

  • Upside Risks: Above 1.1545 sets a bull trend to aim for 1.1621, 1.1815 and 1.2000.
  • Downside Risks: Below 1.1268/62 sees a bear trend to target 1.1214, 1.1119, 1.1000 and 1.0839

Resistance and Support:

1.1434 1.1497** 1.1545*** 1.1580/81 1.1621**
1.1378/80 1.1344/36* 1.1308/1.1296** 1.1268/62*** 1.1214**

4 Hour EURUSD Chart

eurusd chart