EUR/GBP Daily Outlook
Daily Pivots: (S1) 0.8688; (P) 0.8715; (R1) 0.8732;
The choppy decline from 0.8844 is in progress and focus is on 0.8679 support. Break there will indicate completion of the rebound form 0.8620. And intraday bias will be turned back to the downside for this support. Whole decline from 0.9305 will likely be resuming too. On the upside, break of 0.8844 will resume the rebound from 0.8620. That will also revive the case of larger bullish reversal. EUR/GBP should target 0.8967 cluster resistance (50% retracement of 0.9305 to 0.8620 at 0.8963).
In the bigger picture, for now, the decline from 0.9305 is seen as a leg inside the long term consolidation pattern from 0.9304 (2016 high). Such consolidation pattern could extend further. Hence, in case of strong rally, we’d be cautious on strong resistance by 0.9304/5 to limit upside. Meanwhile, in another decline attempt, we’d expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside.
USD/CAD Daily Outlook
Daily Pivots: (S1) 1.2977; (P) 1.3013; (R1) 1.3056;
Upside momentum in USD/CAD is quite unconvincing as seen in 4 hour MACD. But with 1.2967 minor support intact, intraday bias remains on the upside. Current rise from 1.2526 should target a test on 1.3124 resistance next. Decisive break there should confirm medium term trend reversal. Nonetheless, below 1.2967 minor support will dampen the bullish case and turn bias neutral again.
In the bigger picture, we’re favoring the case that that rebound from 1.2061 has not completed yet. Focus is back on 38.2% retracement of 1.4689 to 1.2061 at 1.3065. Sustained trading above there will confirm medium term bullish reversal. That is, down trend from 1.4689 has completed at 1.2061 already. In that case, next target will be 61.8% retracement at 1.3685. However, break of 1.2526 support will dampen this bullish view again. And, focus will be back on 1.2061 key support level, which is close to 50% retracement of 0.9406 (2011 low) to 1.4689 (2015 high) at 1.2048.
