GBP/USD Daily Outlook
Daily Pivots: (S1) 1.3037; (P) 1.3088; (R1) 1.3120;
Intraday bias in GBP/USD remains neutral at this point. As long as 1.2963 minor support holds, rebound from 1.2662 could extend higher to 100% projection of 1.2661 to 1.3042 from 1.2784 at 1.3165 and above. However, as rise from 1.2661 is seen as a corrective move, upside should be limited by 1.3316 key fibonacci level to bring near term reversal. On the downside, break of 1.2963 minor support will now argue that rebound from 1.2661 has completed. In such case, intraday bias will be turned back to the downside for 1.2784 and then 1.2661.
In the bigger picture, whole medium term rebound from 1.1946 (2016 low) should have completed at 1.4376 already, after rejection from 55 month EMA (now at 1.4062). The structure and momentum of the fall from 1.4376 argues that it’s resuming long term down trend. And this will be the preferred case as long as 38.2% retracement of 1.4376 to 1.2661 at 1.3316 holds. However, firm break of 1.3316 would bring stronger rebound to 61.8% retracement at 1.3721. And, the eventual depth of the fall from 1.4376, and the chance of hitting 1.1946 low, will depend on the strength of the interim corrective rebound from 1.2661.
EUR/USD Daily Outlook
Daily Pivots: (S1) 1.1588; (P) 1.1656; (R1) 1.1690;
Intraday bias in EUR/USD remains neutral first. At this point, rebound from 1.1300 could still extend through 1.1733 resistance. But we’d expect strong resistance from 38.2% retracement of 1.2555 to 1.1300 at 1.1779 to limit upside, at least on first attempt, to bring near term reversal. On the downside, break of 1.1525 support will indicate completion of this corrective rebound. Retest of 1.1300 low should then be seen. However, firm break of 1.1779 will extend the rise to 100% projection of 1.1300 to 1.1733 from 1.1525 at 1.1958.
In the bigger picture, a medium term bottom should be in place at 1.1300, on bullish convergence condition in daily MACD and some consolidations would be seen. But still, note that EUR/USD was rejected by 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. That carries some long term bearish implications. Thus, we’d expect fall from 1.2555 high to resume after consolidation completes. Below 1.1300 should send EUR/USD through 61.8% retracement of 1.0339 to 1.2555 at 1.1186. And, in that case, EUR/USD would head to retest 1.0339 (2017 low).