Forex Analysis GBP/USD & EUR/USD

GBP/USD

Monthly

  • Previous month has a bearish engulfing candle – this monthly candle for December could see follow through selling – Risk factor remain to favour the bears unless we get a doji or bullish hammer to change the tide
  • Risk factor continue to favour the bears given the large bear flag formation but cannot rule out a potential double bottom

Weekly

  • GBP look weak again post ECB statement-however, the retest lower could make or break the current wedge pattern
  • Traders could potentially look for a small long at 1.48868 and 1.48124 after FOMC
  • The risk reward on the weekly seems to favour long for now if price reacted well with new buyers

Daily

  • Post ECB ramp is giving back most of all the gains made – it is too early to say which direction is being favoured but given USD V shape recovery – weakness in Sterling could continue but look for long on the lower end of the channel

EUR/USD

Monthly

  • A potential double bottom? Price action favour the bears as they remain in control but we are wary of any more short covering momentum
  • Only a break out of the downtrend line will give bulls the room to try higher

Weekly

  • A strong bullish engulfing candle – seems to suggest that more upside can be achieved although there are many resistances ahead
  • Downside remains vulnerable due to the sharp short covering – a break and close below 1.078 will give sellers more confidence

Daily

 

 

 

 

 

 

 

 

 

  • A strong short covering rally while pullback to the Fib levels could give buyers a chance to re-enter and trade higher with tight stops
  • Break above 1.1 give rooms to test the pink trendline
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