The EUR/USD and GBP/USD is ending the week looking at different directions. However, the USD-story will likely dominate and they will both likely by bearish. Let’s take a look at their technical pictures.
The EUR/USD started the week falling to 1.0818, after which is started to consolidate. It is now in a bullish correction. But even though it broke above a falling trendline, it isstill bearish as it trades under the 200-, 100-, and 50-period simple moving averages (SMAs). The RSI is also still under 60, which means that the prevailing bearish momentum is till in play. Now, the market might fade the EUR/USD back to the bearish trend as it tests the 1.10 handle, but there is still room to 1.1065 before the pair faces a key resistance in the form of a previous support. Then above 1.1150, EUR/USD would likely be back in an uptrend.
To the downside, a break below an intra-week support/resistance pivot around 1.0920 should revive the bearish outlook.
The GBP/USD continued its downward path this week instead of consolidating like EUR/USD. Part of it was due to an underwhelming GDP report. But most of it is simply USD-strength.
The GBP/USD looks poised to test the May low of 1.5078 next week. Now, there is an extended bullish divergence in the 4H chart between price lows and the RSI lows. This shows a slowdown in momentum, but does not always result in a reversal. Even if it results in a pullback, we should monitor the 1.5450, former support pivot, as resistance. It will take a break above 1.55, the moving averages, and a falling trendline seen in the 4H chart to open up the bullish outlook. This bullish scenario would have more of a chance if the EUR/USD also pushes above 1.1150.
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