EUR/USD and GBP/USD in Bullish Correction Attempts

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EUR/USD and GBP/USD in Bullish Correction Attempts

This week, EUR/USD and GBP/USD consolidated, stalling sharp declines in both pairs. We saw strong retail sales and consumer sentiment data out of the US, but this failed to bring USD back to strength. The fact that the USD is fading despite strong data suggests that it may be due for some consolidation, which would allow EUR/USD and GBP/USD continue its consolidation and maybe bullish correction. Let’s take a look at the charts.

The EUR/USD broke above this week’s triangle resistance. It is not out of the clear yet to signal a bullish correction scenario, but if it does, we should expect sellers in the 1.3110-1.3120 area. If price instead falls below 1.2920, we should be prepared for a bearish continuation scenario. The GBP/USD has already put in a mini-price bottom, and is consolidation just above this week’s price bottom. A break above 1.6276 should continue this bullish correction but a break below 1.62 might revive a bearish outlook at least back toward the 1.6051 low.

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