EUR/USD Daily Outlook
Daily Pivots: (S1) 1.1618; (P) 1.1676 (R1) 1.1707;
EUR/USD’s recovery today pulled 4 hour MACD above signal line again. A temporary low is in place and intraday bias is turned neutral for consolidations. Even in case of rebound, firm break of 1.1995 resistance is needed to confirm reversal. Otherwise, outlook will remain bearish for deeper decline. Below 1.1643 will resume the fall from 1.2555 and target 50% retracement of 1.0339 to 1.2555 at 1.1447 next.
In the bigger picture, current development suggests that EUR/USD was rejected by 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. And, a medium term top was formed at 1.2555 already. Decline from there should extend further to 61.8% retracement of 1.0339 to 1.2555 at 1.1186 and below. For now, even in case of rebound, we won’t consider the fall from 1.2555 as finished as long as 55 day EMA (now at 1.2049) holds.
GBP/USD Daily Outlook
Daily Pivots: (S1) 1.3263; (P) 1.3327; (R1) 1.3359;
Intraday bias in GBP/USD remains on the downside for the moment. Current fall from 1.4376 should target 50% retracement of 1.1946 to 1.4376 at 1.3161. On the upside, break of 1.3568 resistance is needed to indicate short term bottoming. Otherwise, outlook will remain bearish in case of recovery.
In the bigger picture, current development suggests that whole medium term rebound from 1.1936 (2016 low) has completed at 1.4376 already, with trend line broken firmly, on bearish divergence condition in daily MACD, after rejection from 55 month EMA (now at 1.4223). 61.8% retracement of 1.1936 (2016 low) to 1.4376 at 1.2874 is the next target. We’ll pay attention to the reaction from there to asses the chance of long term down trend resumption. For now, outlook will stay bearish as long as 55 day EMA (now at 1.3730) holds, even in case of strong rebound.
