Forex Video Briefing (9/12) – EUR/USD and GBP/USD
EUR/USD was trading in a triangle this week, holding above the 1.2860 level. It lost volatility and was forming a triangle. Note the small hourly candles aroudn 1.2925 where the 100-, and 50-hour simple moving averages converged. After the data points, the market shook a little both ways, but eventually pushed above the triangle resistance, and is now poised to test the consolidation high at 1.2987. It is testing the 200-hour SMA, and if there is a pullback, a market in bullish correction mode should hold above 1.2950. A break below 1.2920 might signal bearish continuation.
Looking at the bullish correction outlook, if price breaks above the 1.2990 handle, it opens up range breakout target of 130 pips higher, which is around 1.3117. The 130 pips is the width of the current consolidation range, which can be interpreted as an inverted head and shoulders pattern as well. You can see in the 4H chart, that there is a previous support at 1.3112, so monitor the 1.3110-1.3120 area for sellers if the bullish correction scenario materializes. Again, if price instead falls back below 1.2920, we should look for the bearish continuation scenario.
GBP/USD is already in a bullish correction. When we look at the 4H chart, we see that price found a bottom above 1.6051 when it broke above 1.6156. After this price bottom, cable is consolidating between 1.6276 and 1.6203. A break below 1.62 can revive the bearish outlook. Otherwise, the current bullish correction scenario has upside toward the 1.6340 resistance pivot. Above that, the 1.6440 level would be the next key resistance.
Now, if price falls back below 1.62 would first expost the 1.6051 support pivot, then the 1.60 psychological level.