Forex Video Briefing (7/21) – EUR/USD, GBP/USD, Gold (XAU/USD)
EUR/USD has been bearish in July, but has been consolidating in the past couple of sessions. Last week, we did see a dip below 1.35, but we saw a quick rebound after it tagged 1.3490. This week we started with a tag of 1.3550 before price fell back in the middle of the consolidation range, around 1.3520. The 3-session range is setting up for a breakout after tomorrow’s inflation data. A break above 1.3550 opens the 1.3575-1.36 area. There is likely resistance around the 1.3580 area, which was a previous support/resistance pivot, and a falling trendline. break below 1.3490 after the inflation data would suggest a test of the 2014-low at 1.3476. Below that we should expect a bearish swing towards the 1.3295-1.33 lows from Nov. 2013.
GBP/USD has been consolidating in July even after a false breakout to a fresh 2014 high at 1.7190. The false breakout does suggest the pair should be in a period of consolidation, bearish correction. So far, price has been pushing lower and trying to put in a price top, however, the bearish outlook could be limited. The first place to look for buyers should be around the 1.70 handle, which is psychological support, as well as a previous support/resistance pivot area. It is also likely to be reinforced by July’s rising trendline support. Finally, being 38.2% retracement of June’s rally also makes 1.70 a level to monitor for support. Look for a rebound from around 1.70 especially if the 4H RSI nears 30 and then holds and turns back up. Then a break back above the middle of the current consolidation range, which can be done with a break above 1.7125, should revive the bullish outlook.
Gold price is found in the middle of a triangle, which is set up by a falling and a rising trendline from last week. The break is imminent. A break above 1320 could open up a swing toward the 1325-1330 area of common resistance. There if price holds, there is still further risk of bearish correction. The risk of bearish correction opens up if price falls below 1305 and thus would clear a local support pivot and the rising support from last week. In this scenario, we can expect another bearish correction swing with the 1280.50, 61.8% retracement in sight.