Daily Currency Outlook: GBP/USD And EUR/USD : September 25,2018
ActionForex | Sep 25, 2018 02:41AM ET
GBP/USD Daily Outlook
Daily Pivots: (S1) 1.3064; (P) 1.3116; (R1) 1.3168;
Intraday bias in GBP/USD remains neutral for the moment. Risk stays on the downside as long as 1.3297 resistance holds. The corrective rise from 1.2661 could have completed at 1.3297, ahead of 1.3316 key fibonacci level. On the downside, break of 1.3042 resistance turned support will bring deeper fall to 1.2784. Break there will argue that larger down trend from 1.4376 is resuming for a new low below 1.2661.
In the bigger picture, whole medium term rebound from 1.1946 (2016 low) should have completed at 1.4376 already, after rejection from 55 month EMA (now at 1.4062). The structure and momentum of the fall from 1.4376 argues that it’s resuming long term down trend. And this will be the preferred case as long as 38.2% retracement of 1.4376 to 1.2661 at 1.3316 holds. However, firm break of 1.3316 would bring stronger rebound to 61.8% retracement at 1.3721. And, the eventual depth of the fall from 1.4376, and the chance of hitting 1.1946 low, will depend on the strength of the interim corrective rebound from 1.2661.
EUR/USD Daily Outlook
Daily Pivots: (S1) 1.1708; (P) 1.1762; (R1) 1.1800;
Despite spiking higher to 1.1814, EUR/USD quickly retreated back to range. Intraday bias is turned neutral again. At this point, focus stays on 38.2% retracement of 1.2555 to 1.1300 at 1.1779. Break of 1.1723 minor support will suggest rejection by 1.1779 and would be in line with our original view. In such case, intraday bias will be turned back to the downside for 1.1525 support. However, sustained break of 1.1779 will pave the way to 100% projection of 1.1300 to 1.1733 from 1.1525 at 1.1958.
In the bigger picture, a medium term bottom should be in place at 1.1300, on bullish convergence condition in daily MACD and some consolidations would be seen. But still, note that EUR/USD was rejected by 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. That carries some long term bearish implications. Thus, we’d expect fall from 1.2555 high to resume after consolidation completes. Below 1.1300 should send EUR/USD through 61.8% retracement of 1.0339 to 1.2555 at 1.1186. And, in that case, EUR/USD would head to retest 1.0339 (2017 low).
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