- A mixed, but broadly more negative US Dollar theme has been seen over the past 12-24 hours across Forex markets.
- This has been highlighted by a strengthening of the Euro against the US Dollar and a more positive technical tone upside risks for the EURUSD forecast, as we explore below.
- However, the Pound remains a laggard, still vulnerable versus the US currency, with trade talks still weighing, for a negative GBPUSD forecast.
EURUSD day trade outlook: Surge shifts risks higher
A surge higher on Tuesday above 1.1799 and 1.1831 resistances to build on Monday’s rebound above 1.1758 resistance and thereby rejecting negative pressures from the mid-October plunge lower through 1.1723/18 into the 1.1694/83 support area, to switch the bias to the upside Wednesday.
Day trade setup
- We see an upside bias for key 1.1870; a break here aims for 1.1900 and critical 1.1917, maybe towards 1.1966.
- But below 1.1799 opens risk down to 1.1751 and possibly 1.1687/83.
EURUSD intermediate-term outlook
The late September push below the key 1.1697/94 area confirmed a bigger Head & Shoulders Top pattern and signalled an intermediate-term shift to a bear trend.
- Downside risks: We see an intermediate-term bear trend to aim for 1.1539, 1.1369 and maybe 1.1166.
- What changes this? Above 1.1870 shifts the intermediate-term bear trend to neutral; through 1.1917 to an intermediate-term bull trend.
GBPUSD day trade outlook: Aiming lower
A Tuesday probe lower through 1.2922 support to 1.2910, to reinforce Monday rebound failure exactly at our 1.3024 resistance, and whilst even below the peaks at 1.3064/82 we see negative forces from the erratic October activity below these resistance highs, to keep the bias to the downside Wednesday.
Day trade setup
- We see a downside bias for 1.2910; a break here aims for the 1.2861/45 supports and maybe the 1.2819/05 area.
- But above 1.3024 opens risk up to 1.3064/82, which we would look to try to cap. Above aims possibly for 1.3100/05.
GBPUSD intermediate-term outlook
The early October push above 1.3007 signalled an intermediate-term shift to a range, seen as 1.3239 to 1.2687/75.
- Upside risks: Above 1.3239 sets an intermediate-term bull trend to aim for 1.3359, 1.3486/1.3515 and maybe 1.3711.
- Downside risks: Below 1.2687/75 sets an intermediate-term bear trend to aim for 1.2644, 1.2480 and maybe 1.2251.
