GBP/USD grinding lower despite break below key support
The GBP/USD pair is continuing to move gradually lower, following a break below the important $1.517 support level. This inability to really show the bearish trend and strong direction following the breakout is a little of a worry. However, for now we continue to create new lows and lower highs, which appears to be likely to resume this morning following a brief rally. Thus, I continue to favour a bearish outlook for a move back to $1.5107 and $1.51.
Until we begin to see new highs created and higher lows the outlook remains bearish, and I could see a move down to $1.5 should it begin to gain more convincing direction. A move back above $1.518 would be the initial warning sign to any bullish momentum growing.
EUR/GBP threatening to turn lower once more
The EUR/GBP pair has been showing possible signs of reversing lower following an attempted break higher above £0.7389 resistance. The creation of a new lower high after a double-top has subsequently led to a new lower low. However, it is certainly worth noting that the 20-period SMA (four hour) has been working out as an absolutely perfect support and resistance level over the past week, and we have seen the price sell off once more at this indicator.
I personally believe we will see this pair reverse lower to continue the rangebound market we have seen over the past month, and thus I am bearish for a move back to the downside with support levels to watch coming in at £0.7356, £0.7335, £0.73 and £0.725.
The problem is that given such a move could take a number of days to come through, and with today’s jobs report, I would not want to be taking the risk. Consequently, I am bearish in the lead up to the release, yet will reassess this outlook given the response to today’s numbers.
AUD/USD breaking higher in continuation of recent resurgence
The AUD/USD pair is moving higher once more this morning as we seek to confirm the bullish connotations of yesterday’s completed double-bottom formation.
We have seen a number of recent bursts higher from $0.6938 support, and the bullish engulfing pattern this morning looks likely to spark yet another move into new territory for the week.
The key $0.7044 support level is currently holding, and this could provide a basis for another leg higher. However, ultimately I am bullish while the price remains above $0.7012, and am looking for another leg higher towards $0.7085 and $0.71.