EUR/USD

 

EUR/USD's rebound was limited below 1.5143 high last week and subsequent sharp fall on Friday and break of 1.4828 support revives that case that EUR/USD has topped out at 1.5143 already. Initial bias is on the downside this week. Break of 1.4801 will bring deeper decline towards 1.4626 support next. On the upside, above 1.4894 minor resistance will turn intraday bias neutral first and bring consolidations. But recovery should be limited below 1.5037 resistance and bring fall resumption.

 

In the bigger picture, the failure to break through 1.5143 resistance and subsequent sharp fall and break of 1.4828 support revives the case that EUR/USD has topped out at 1.5143 already. Focus now turns to 1.4626 support and break there will confirm that case rise from 1.2456 has finished at 1.5143 already, on bearish divergence conditions in daily MACD and RSI. The whole down trend from 1.6039 is possibly resuming for another low below 1.2329 in such case.

 

On the upside, another high above 1.5143 cannot be ruled out for the moment. But after all, even in case of another rise, we'd expect strong resistance at 123.6% projection of 1.2329 to 1.4719 from 1.2456 at 1.5410 to conclude the medium term rise from 1.2456 eventually.

 

In the long term picture, the lack of impulsive structure of the rise from 1.2329 argues that it's the wide range consolidation that started from 1.6039. Another medium term decline could still be seen to 1.2329 and below but downside should be contained above 1.1639 support. The long term up trend from 0.8223 is set to resume after completing the medium term consolidation from 1.6039.

 

Pips Mover’s Weekly Pivot Point for this week: 1.4925

Historical Levels up to date: 1.4865, 1.4675, 1.4420, 1.4090, 1.3840, 1.3600

 

GBP/USD   

 

While the rebound from 1.6271 was strong, it's still limited below 1.6744 resistance and thus there is no change in the bearish case that fall from 1.6875 is still in progress. The fall from 1.6720 is possibly resuming such decline and initial bias is on the downside this week for 1.6250/71 support first. Break there will also confirm that rise from 1.5706 has finished at 1.6875 and bring deeper fall to retest this support. On the upside, however, note that a break above 1.6720 resistance will invalidate this view and argue that rise from 1.5076 is resuming for 1.7043 resistance instead.

 

In the bigger picture, we're still slightly favoring the bearish case that medium term rebound from 1.3503, which is is treated as a correction to down trend from 2.1161, has completed at 1.7043. Focus now turns to 1.5706 support (38.2% retracement of 1.3503 to 1.7043 at 1.5691) for confirmation. Break there will argue that whole down trend form 2.1161 is likely resuming for a new low below 1.3503. On the upside, however, break of 1.7043 will indicate that rise from 1.3503 is still in progress to resistance zone of 1.7332/8236 (50% and 61.8% retracement of 2.1161 to 1.3503) before completion.

 

In the longer term picture, the corrective nature of the multi-decade advance from 1.0463 to 2.1161 as well as the impulsive nature of the fall from there suggests that GBP/USD is now in an early stage of a long term down trend. Rebound from 1.3503, which is treated as correction in the larger down trend, should be limited by resistance zone of 1.7332/8236 and bring down trend resumption towards 1.4063 low. We'll hold on to the bearish view as long as 1.8236 fibonacci level holds.

 

Pips Mover’s Weekly Pivot Point for this week: 1.6510

Historical Levels up to date: 1.9445, 1.8490, 1.7520, 1.6570, 1.6255, 1.5675