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GBPUSD 1 HOUR CHART
Blue Amazing Trader lines dominating but would need to get through 1.2450 (Power of 50 level) to accelerate the downside and shift the focus from 1.25 but….
only back above 1.25 would slow the risk..
GBPUSD has been an underperformer with some pressure coming from a bounce in EURGBP,which in turn is giving EURUSD some support).
EURGP 30 MIN – Now faces resistance
Following up on my earlier post where looming support proved too tough and now EURGBP is facing resistance at the .8561 level cited in that post. So far .8555 resistance is holding, needing to stay above .8545 to keep its bid.
Take note of the two red Amazing Trader (AT) lines highlighted, otherwise known as an AT Directional Indicator, signaling a potential shift in directional risk that played out.
EURGBP 4 HOUR CHART – MONTH END
As I noted, there are often some erratic month-end flows in EURGBP, especially around the 4 PM London fixing.
EURGBP has been under downward pressure (note blue AT lines) to start the week with key supports looming below at .8520 and the key .8484-.8502 lows (not shown on this chart).
EURUSD 1 HOUR CHART – STUCK IN A RANGE?
EURUSD has been stuck so far for a second day within a 1.0674-1.0753 range set last Friday with attention mainly on the JPY after BoJ interventions and verbal threats overnight.
Range so far this week 1.0686-1.0734
As I noted yesterday, it is month end, and while not an exact science the theory says if US stocks are lower on the month there is USD buying to adjust forex hedges. As I said this is not an exact science so just something to keep an eye on.
Also, month end often sees EURGBP erratic swings so watch into the 4 PM London fixing as it can impact EURUSD and GBPUSD.
Otherwise, markets seem to be on hold ahead of the FOMC decision tomorrow.
GBPUSD 4-HOUR CHART – REVERSAL OF FORTUNE
GBPUSD, which fell sharply to end last week on shifting interest rate cut expectations has reversed course as the market reassesses that outlook.’
This saw UK 10-year bond yield rise 9BPS to close yesterday at the highest level for the year.
Combine that with JPY weakness and a sharp GBPJPY rise, you can see why there has been a GBPUSD reversal.
GBP is also firmer on other crosses (e.g. EURGBP is lower as well).
Looking at this chart, it needs to hold 1.2497 *=(suggests 1.25 as well) to maintain a strong bid although support is seen as long as it stays above 1.2423.
You have seen me post one of my favorite blog articles. The Power of 50. Look at current rates
GBPUSD 1.2350
EURUSD 1.0655
AUDUSD .6450
GBPUSD 30 MINUTE CHART -1.23-1.24
GBPUSD getting a pop from its flash PMI but not enough to take out 1.2399
This leaves GBPUSD consolidating within 1.23-1.24
Expect a mgnetic 1.2350 to be pivotal and set its intra-day boas.
What has taken some pressure off the downside is EURGBP buying pressures easing.
EURGBP DAILY CHART – BREAKOUT MODE
The key level on this chart is .8715, now needing to hold the,8620 break to expose it.
On the downside, it keeps a risk on the upside as long as it stays above .8550, stronger while above the.8585 breakout level.
Even if you don’t trade EURGBP you can use it as a clue to trade GBPUSD and EURUSD as I explain in
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‘How you Can Use Currency Crosses to Trade Spot ForexGBPUSD WEEKLY – HOW LOW CAN IT GO?
I had to go to the weekly chart to find the next key level that is not until 1.2035.
That may be a reach as it would imply a much stronger dollar but that is what this chart shows following the break of 1.2499
If trading the GBPUSD, keep an eye on EURGBO as this was the flow that sent it lower on Friday.
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