GBPUSD bull trend questioned; EURUSD downside range risks

Chris Lee

  • The general global financial market theme continues to move from a “risk off” scenario towards more of a “risk on” theme, BUT the US Treasury market selloff to higher yields has seen the US Dollar strengthen into late April.
  • Recent inflation data from the UK alongside more cautionary, dovish signals from Bank of England Governor Carney has seen GBPUSD begun to question the intermediate-term bull trend (with risk of shifting back to neutral below 1.3964)
  • EURUSD remains within an indecisive, range consolidation environment, but with the intermediate-term risks skewed now to the downside. Below 1.2153 would see an intermediate-term bearish shift.

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GBPUSD Downside threats

Another plunge lower Friday through 1.4068 and 1.3999 further supports reinforcing Thursday’s sell off through 1.4133 and 1.4077 supports and also Wednesday’s selloff, keeping risks lower Monday.

The latter March break above 1.4145 set an intermediate-term bull trend, BUT growing risk is for a push below 1.3964, shifting the intermediate-term outlook back to neutral.

For Today:

  • We see a downside bias through 1.3992; break here aims for the critical 1.3964 level, then maybe 1.3921 and 1.3873.
  • But above 1.4044 aims at 1.4099 and maybe opens risk up to 1.4188.

 Intermediate-term Outlook – Upside Risks: We see an upside risk for 1.4377.

  • A higher target would be 1.5006
  • What Changes This? Below 1.3964 shifts the outlook back to neutral; through 1.3710 is needed for a bear theme.

Resistance and Support:

1.4044 1.4099* 1.4188 1.4246/47** 1.4315*
1.3992 1.3964*** 1.3921 1.3873* 1.3840

4 Hour GBPUSD Chart


EURUSD Negative shift

A significant sell off Friday through 1.2298 and 1.2259 supports rejecting the positive tone from the mid-April push above 1.2396 resistance (and earlier April recovery from 1.2214), to shifts risks lower Monday.

We see an intermediate-term range theme, 1.2539 to 1.2153.

For Today:

  • We see a downside bias for 1.2249, then 1.2214; break here aims for 1.2205/03, maybe key 1.2153.
  • But above 1.2353 opens risk up to 1.2414/21.

 Intermediate-term Range Breakout Parameters: Range seen as 1.2539 to 1.2153.

  • Upside Risks: Above 1.2539 sets a bull trend to aim for 1.2600/02, 1.2827 and 1.3000.
  • Downside Risks: Below 1.2153 sees a bear trend to target 1.1914, 1.1716 and 1.1553.

Resistance and Support:

1.2353 1.2414/21** 1.2476/84** 1.2539*** 1.2566
1.2249 1.2214/03* 1.2153*** 1.2110 1.2059

4 Hour EURUSD Chart