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EURGBP has exited its short- term neutral zone, clearing the key 0.8585 📉resistance that capped gains since late July. While this breakout encourages further recovery ahead,📈 buyers face another immediate resistance at 0.8620 a barrier that must fall to sustain upside momentum within a 10-month-old bearish trend
GBPUSD DAILY: Crosses driving it down Momentum: Down
Under pressure following the break of 1.3500-10, which would need to be regained to ease the risk. So far, pausing just above 1.3474, the target following the 1.3510 break.. Looking for a catalyst? Weaker GBP crosses, most notably vs. the JPY (GBPJPY down) but vs. EUR as well (EURGBP up).
Market Update: Month end?
USD slipped in what appeared to be month end flows weighing on the currency. For EURUSD to negate Friday’;s breakdown, 1.1635+ would be needed (similar level in GBPUSD would be 1.3570)
US500 remains defensive below 7700 but downside contained while above 7640-50
Crude oil backing off and consolidating after building on the opening gap higher.
GBPUSD 4 HOUR: Too tight to last
Trend: UP
Momentum: Consolidating
Consolidating within 1.3618-56, a range too tight to last but with a lower high making the downside more vulnerable, at least as long as the top end holds.
Fallback support is at 1.3589, which needs to hold to keep thoughts away from 1.3500-20.
GBPUSD pinned a six-month📈 high of 1.3674 last Friday before shifting to the sidelines, aiming for a 3% monthly gain within a short-term ascending channel. Although the bulls retained control above 1.3600 in the next sessions, they lacked strong momentum to clear May’s📉 resistance of 1.3656, raising speculation that the rally might be running out of steam.
Forex Market Snapshot
The dollar seems set to end the week on the defensive as it trades lower ahead of the US open. US bond yields have steadied and stocks are up but talk the U.S. fiscal position, with the total deficit surpassing $40 trillion grabbing headlines and rising, is acting as a weight on the dollar.
- AUD and NZD outperforming,
- USDJPY is weaker after completing a 61.8% retracement (159.11) but is still above 158
- GBPUSD has extended its high, marginally so far, through a 1.3658 target
- EURUSD retested its 1.1710 high, holding so far
- USDCAD extended its low but so far holding above 1.3730 support
GBPUSD DAILY: Mission accomplished?
Trend: UP Momentum: UP
As noted yesterday, (GBPUSD) needing to establish above 1.3557 and make a solid break of 1.3571 to put 1.3658 on the map as a target.
High today: 1.3659 so is it mission accomplished? Misssion accomplished while the high stays intact but only back below 1.3550-60 would shift the risk, below 1.3519 to negate it.
USDJPY 1 HOUR – Yields confound
Trend: Down Momentum: Stalled?
Bounce in US yields despite weaker US data confounding the bears and has lifted USDJPY. USDJPY bounce from a pause above 158.57 would need to establish above 159.50 to put 160 and a BoJ alert in play.
Elsewhere EURUSD failed to hold a break of 1.1581 and GBPUSD failed to hold its 1.3550 break.
US yields ticking up after front running lower ahead of data (2 year yield now close to unchanged on the day, 10 year up)
Seeing some modest correlations with USD following (cautiously as there should be limit on yields upside and market more sensitive to a dip than a blip).
Next data: U if M Consumer Sentiment
Addendum: Brief USD blip setup a fresh run to downside… EURUSD testing its 1.1581 August range top. GBPUSD testing 1.3550+. AUD and CAD extending highs. USDJPY lower on the day but still above 158.42-57 support.
EURUSD 4 HOUR – August range remains intact
I remember a time when the average daily EURUSD range exceeded 100 pips but in the current environment, that would be a huge trading day
August range to date: 1.1500-80 (80 pips)
One reason for a tighter range is the impact of various cross flows. Today, for example, EURUSD is firmer, giving EURUSD some support while weighing modestly on GBPUSD so keep an eye on this cross.
Market Update: Forex
USD trading soft but so far with limited follow through as it seems to be following a dip in US yields, specifcally the shorter-end despite CPI coming in as per the consensus. Ranges/key levels are still intact with ones to watch:
- EURUSD 1.1580 (top of range) and 1.,1550 as a market pivoit
- USDJPY 158.42 recent low)
- GBPPUSD 1.3550 (next target)
GBPUSD 4 HOUR: Watch 1.35
Looking to establish 1.3500, which traded today for the 4th day in a row, as support to build momentum for a run at a 1.3550 target.
So far, a 1.3530 double top stands in the way.
Note a softer EURGBP is currently providing some support for GBPUSD while keeping a cap on EURUSD.
GBPCHF (firmer) has been an outperformer, perhaps reflecting some switching in funding currencies from JPY (USDJPY has dipped) to CHF.,
Forex Market Snapshot
The dollar is trading firmer as oil prices and bond yields both rose further overnight.
MOves, however, have been modest despite hopes for the STrait reopening fading and the fallout from the weasker NFP report dissip[ated.
EURUSD is bac trading just below the 1.1540 midpoint of its 1.1500-80 rnage, USDJPY is holding 159+ but wary of a BoJK ambush anmd GBPUSD is pivioting 1.35 afdter trying for a mini breakouit yesterday.
