Technical Analyst, Saxo Bank
Summary: EURUSD and the Dollar Index still in correction phase. Could continue to 1.10 and 101.73 respectively.
GBPUSD correction likely to be done at 1.28 and uptrend set to resume
EURGBP failed to confirm Double Bottom pattern and downtrend is resuming
EURUSD correction is still ongoing and has potential to continue to the 0.618 retracement at 1.10 before uptrend likely resumes.
However, EURUSD could spike down to test the lower rising trend line and the 0.786 retracement at 1.0928 without cancelling the uptrend – both short- and medium-term. A close below 1.0830 would do that.
So unless EURUSD is closing below 1.0830 it still has medium-term potential to 1.1485
Dollar Index correction has taken it back above the resistnace level at 100.68. However, contrary to previously where that level was a strong support it now doesn’t seem to be a strong resistance and not a key Bull/Bear pivot level.
The Dollar Index can perform a correction to the 0.6518 retracement at 101.73 without jeopardizing the overall downtrend. A close above 103.30 is needed for the bearish picture to be demolished
The Dollar Index still has downside potential to 98.60-97.45
GBPUSD Correction in GBPUSD could be done after touching the 0.618 retracement at 1.28.
A rebound and uptrend resuming is likely as the medium-term uptrend is intact and RSI still positive with no divergence.
However, if GBPUSD breaks below 1.2795 it could dip down to the 0.786 retracement at 1.2708 testing the lower rising trendline in the process. That will not demolish the bullish picture. A close below 1.2590 will.
Medium-term trend is still bullish supported by RSI (weekly chart). There should be room up to the 0.786 retracement at 1.3012 and resistance area around 1.3025. The Bullish scenario is supported by positive RSI with no divergence.
A break above could take GBPUSD back to levels not seen since Q1/Q2 2022 just prior to the massive sell-off around 1.3745.
A close below 1.2590 will demolish the bullish picture and a downtrend is likely to unfold EURGBP has failed to close above 0.8660 thus failing to confirm the Double bottom reversal pattern.
Down trend seems to be resuming with a possible drop to previous lows at around 0.85 to follow.
However, EURGBP can still unfold and confirm a Double bottom pattern , it just needs to close above 0.8660
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