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GBPUSD bearish shift threat with EURUSD still aiming lower

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Updated:

  • In our report here on 12th November. we highlighted an upside bias for GBPUSD and indicated intermediate-term downside threats for EURUSD.
  • Since that article was written, however (and despite the UK and EU agreeing to a Brexit deal), political unrest in the UK has seen GBPUSD selloff and although still within the intermediate-term, wider range, the bias is skewed towards a bearish shift, signalled below 1.2694.
  • The EURUSD FX rate has produced a bearish intermediate-term signal, below 1.1300, and despite a subsequent rebound in November, the setbacks from below 1.1500 resistance sustains an intermediate-term bearish outlook for December.

GBPUSD

Still a bearish threat

A Friday setback below our 1.2754 level (from below 1.2850), fully rejecting Wednesday’s firm rebound (above 1.2778 and 1.2820 resistances) after Fed Powell’s speech, to keep risks lower Monday.

The early November push above 1.3044 set an intermediate-term range seen as 1.2964 to 1.3258, BUT with skewed risk for an intermediate-term bear shift below 1.2694.

For Today:

  • We see a downside bias for 1.2724/22; break here quickly aims for key 1.2694 and 1.2661 levels.
  • But above 1.2810 targets 1.2850/64 and maybe aims for 1.2895.

Intermediate-term Range Breakout Parameters: Range seen as 1.2964 to 1.3258.

  • Upside Risks: Above 1.3258 sets a bull trend to aim for 1.3299, 1.3473 and 1.3608.
  • Downside Risks: Below 1.2964 sees a bear trend to target 1.2661 and 1.2500.

Resistance and Support:

1.2810* 1.2850/64** 1.2895 1.2928** 1.2994
1.2724/22** 1.2694*** 1.2661** 1.2613 1.2555

4 Hour Chart

GBPUSD Chart 2018-12-03

EURUSD

Our negative bias reinforced

A selloff Friday as we had been expecting through supports at 1.1373/61, to reject last Wednesday’s spike higher after Fed Powell’s speech which was capped by 1.1419 resistance, sustaining negative forces from the prior selloff through the 1.1326/20 support area and failure back from below the 1.1434 barrier, keeping risks lower Monday.

The plunge through 1.1300 in the first half of November set an intermediate-term bear trend.

For Today:

  • We see a downside bias for 1.1302/00; break here aims for the 1.1265/51 area and maybe the cycle low at 1.1214.
  • But above 1.1371 targets 1.1400 and 1.1419.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 1.1119.

  • Lower targets would be 1.1000 and 1.0839
  • What Changes This?1500 shifts the outlook straight to a bull theme.

Resistance and Support:

1.1371 1.1400 1.1419** 1.1434 1.1472*
1.1302/00 1.1265/51* 1.1214* 1.1166 1.1119**

4 Hour Chart

EURUSD Chart 2018-12-03