Pound bullish, with Euro positive (EURUSD and GBPUSD forecasts)

Intermediate
  • A broadly weaker US Dollar in the wake of Joe Biden US Presidential election victory and the positive news from the Pfizer COVID-19 vaccine trials
  • This activity has seen a further move to a “risk on” theme and a move away from the “safe haven” currencies, the Japanese Yen and the US Dollar.
  • The Euro has been somewhat cautious this week but has sustained a broadly positive tone from the firm advance seen in early November, with EURUSD still pointing higher into mid-month.
  • The Pound has benefited from positive sounding from the EU-UK trade talks on Tuesday, and alongside the more negative US Dollar tone, this has seen a significant rally for GBPUSD, aiming for further gains in the short- and intermediate-term.

EURUSD day trade outlook: Looking for a rebound

A Tuesday dip just below the 1.1790 support and to then bounce from 1.1778, to hang onto upside pressures from Monday’s push above the key 1.1900/17 resistance area (to stall back from 1.1920 for a bearish outside daily pattern and also a bearish engulfing candlestick), but whilst now holding above the 1.1778 level we hang onto upside pressures from the strong early November rally above key 1.1881 resistance (to signal an intermediate-term bull trend), to see risks higher for Wednesday.

Day trade setup

  • We see an upside bias for 1.1865/70 and 1.1920; a break here aims for 1.1966.
  • But below 1.1778 opens risk down to 1.1753 and possibly 1.1709.

EURUSD intermediate-term outlook

The early November push above key 1.1881 resistance signalled an intermediate-term shift to a bull trend.

  • Upside risks: We see an intermediate-term bull trend to aim for 1.2011, 1.2140 and 1.2556.
  • What changes this? Below 1.1709 shifts the intermediate-term bull trend to neutral; through 1.1601 to an intermediate-term bear trend.
8 Hour EURUSD Chart

GBPUSD day trade outlook: Intermediate-term bull shift reinforced 

A Tuesday advance to overcome 1.3239 resistance to 1.3278, to build on Monday’s rally above the key peaks at 1.3177 (to set an intermediate-term bull trend), building on the strong, earlier November rally above the Triangle pattern trend line from early September, to keep risks higher for Wednesday.

Day trade setup

  • We see an upside bias through 1.3280 for 1.3293; a break here aims for 1.3359 and maybe 1.3403.
  • But below 1.3210/03 aims for 1.3167 and possibly opens risk down towards 1.3092.

GBPUSD intermediate-term outlook

The early November push above 1.3177 signalled an intermediate-term shift to a bull trend.

  • Upside risks: We see an intermediate-term bull trend to aim for 1.3359, 1.3486/1.3515 and maybe 1.3711.
  • What changes this? Below 1.2854 shifts the intermediate-term bull trend straight to an intermediate-term bear trend.
8 Hour GBPUSD Chart

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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