Although the euro increased against the greenback yesterday, important resistances continue to keep gains in check. But will they withstand the buying pressure in the coming week?
EUR/USD
Although EUR/USD increased yesterday, the major resistances (the orange resistance zone, the neck line of the head and shoulders formation and the purple declining line) continue to keep gains in check. This means that as long as there is no breakout above them another attempt to move lower and a re-test of the green horizontal support line based on the mid-August low are likely and short positions continue to be justified from the risk/reward perspective.
Very short-term outlook: mixed with bearish bias
Short-term outlook: bearish
MT outlook: mixed
LT outlook: mixed
GBP/USD
Yesterday, GBP/USD rebounded sharply, which approached the exchange rate to the last week highs. Despite this increase, currency bears came back, which triggered a pullback earlier today. Additionally, the Stochastic Oscillator is close to re-generate a sell signal, which suggests that we’ll likely see a decline to the lower border of the brown rising trend channel marked on the weekly chart and the support zone created by the 76.4% and 78.6% retracements (around 1.3000) in the coming week.
Finishing today’s commentary on this currency pair, let’s take a look at the long-term chart.
From this perspective, we see that GBP/USD invalidated the earlier breakout above the red resistance line (the neck line of the long-term head and shoulders pattern), which together with the sell signal generated by the Stochastic Oscillator do not bode well for higher values of the exchange rate in the coming weeks, suggesting further deterioration.
Very short-term outlook: bearish
Short-term outlook: mixed with bearish bias
MT outlook: mixed with bearish bias
LT outlook: mixed
