Forex Video Briefing (8/6) – EUR/USD, GBP/USD, EUR/GBP

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[videojs mp4=”http://forexminute.com/wp-content/themes/forexminuteresponsivenew/video/LookatEURUSD.mp4″]

Forex Video Briefing (8/6) – EUR/USD, GBP/USD, EUR/GBP

The EUR/USD has been declining both on the back of a strong USD, and on the prospect of the ECB applying further stimulus measures, especially with inflation continuing to be stagnant at 0.4% on the year. The EUR/USD shows no sign of letting up and still has further downside risk to the 1.33 handle. You can see on the daily chart, that this is the Nov. 2013 low. If price does not fall below 1.33 after the ECB statement and press conference, there is a chance EUR/USD will consolidate. In this consolidation scenario, we can expect upside to around 1.35, which was June’s consolidation support area. IF price falls below 1.33, the next key support will be the 1.31-1.3105 Sept. 2013 lows.

The GBP/USD has also been dragged down by the strong greenback, but it is also falling because traders are losing confidence in a 2014-rate hike by the BoE. So far this week, GBP/USD has consolidated between last week’s low of 1.6809, and a high of 1.6888. A break above 1.69 should open up the 1.6950 support/resistance pivot, then the 1.70 handle and support/resistance pivot. However, if the market fails to clear above 1.69, the recent downtrend would still be in play, especially if the falling trendline stays intact. In this scenario, the downside risk is first to the 1.68-1.6810 area. Then below 1.68, we have the 1.67 lows from May and June as the next key support.

The EUR/GBP pair has been consolidating since July, in what looks like a rounded bottom attempt. In the 4H chart you see price trying to push and stay above the cluster of moving average (200-, 100-, and 50-period). Price is also trying to stay above the lower bound of the central pivot area, at 0.7915. Meanwhile, the fact the RSI did not tag 30 after it went above 70 shows a slight bullish momentum bias, though it fails to establish development of the bullish momentum. From this consolidation, if price can stay above 0.7940, the focus will be on the 0.7980-85 resistance area. Above this area, the next level to monitor for resistance will be around 0.8030, then some a support/resistance pivot around 0.8065. We should probably limit the bullish outlook to the short-term for now because the prevailing trend is bearish. A break below 0.7915 should put the bearish outlook back in the picture, with pressure on the 0.7875 low. Below that, the market will still have room to 0.7764 before testing the 2012 low.

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Jonathan Millet is currently the proud CEO of ForexMinute.com, the brand new financial news portal which is making waves among Forex traders around the globe for the innumerable Forex resources it offers. He also holds the position of Binary Options Consultant at ForexMinute.com. Before ForexMinute.com was around, Jonathan was a successful Forex dealer and chief market analyst at Forexyard. He has also worked as a Forex trader. His other specialties include advising financial companies of how to stay head of the competition.