- A more positive US Dollar theme has been seen over the past 24-48 hours across Forex markets as global financial markets flipped to “risk off” mode, as global stock indices have dipped after strong rallies.
- However, we continue to see an underlying “risk on” theme driven by:
- Prospects for a US economic relief package before the US election
- Growing prospects for a significant Biden win meaning a smoother transition of power than feared
- Possibility of a Democrat clean sweep at the elections (winning both Houses of Congress and the Presidency)
- Here we look at both the EURUSD forecast and GBPUSD outlook from a technical analysis perspective, for today and into the second half of October.
EURUSD day trade outlook: Looking from a bounce from above 1.1723
A Tuesday dip through 1.1785, but whilst holding above 1.1723 we hang onto a positive tone from last Friday’s rally above 1.1808 and 1.1826 resistances to 1.1831, plus from last week’s rebound from above 1.1694/83 supports (from 1.1723), to keep the bias higher for Wednesday.
Day trade setup
· We see an upside bias for 1.1758; a break here aims for 1.1831 and maybe 1.1870.
· But below 1.1723 opens risk down to 1.1694/83, which we would look to try to hold. Below targets 1.1658.
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.
8 Hour EURUSD Chart
GBPUSD day trade outlook: Looking for a rebound
A Tuesday sell-off below 1.2990/87 support, but whilst holding above th3e up trend line from September and 1.2892 support we see upside forces from Monday’s push up through the 1.3049/56 resistance area to 1.3082, after Friday’s rally above key 1.3007 resistance (to shift the intermediate-term bear trend to a neutral range as 1.3239 to 1.2687/75), to keep the risk to the upside Wednesday.
Day trade setup
· We see an upside bias for 1.2994; a break here aims for 1.3082 and 1.3100/05.
· But below 1.2892 opens risk down towards 1.2845; which we would look to try to hold. Below possibly aims for the 1.2819/05 area.
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.
8 Hour GBPUSD Chart
