EUR/USD Technical View

After 6 weeks of gains the Euro had it’s first week of loses against the US dollar. The week started with a down day but the pair recovered on Tuesday and printed a new high at 1.3850, after making a new high we saw a small retracement in the afternoon which turned into a full reversal on Wednesday and although some thought that the pair had found some strong support with Thursday’s move that was not the case as we saw another big red candle on Friday. Euro is now trading very close to a crowded area, full of support and resistance lines; a continuation of the south move will get the pair very close to the next support area around 1.3600/15, if this area gets breached we have to look at 1.3550/60 for more support and even lower down at 1.3460. Conversely we still have to look out for a possible uptrend move, so if the pair fails to make new lower lows early in the week we might as well start looking for resistance lines that could have an impact over a north bound move. First resistance line is just above current trading prices established on April 27th at 1.3680, higher up we have the 1.3750 level that could act as intermediary resistance before a push towards July 24th highs at 1.3850. As always we will keep an open eye on the markets moves and will act accordingly.

Resistance Levels

• 1.3830 – July 18th High
• 1.3750 – round number
• 1.3680 – April 27th High

Support Levels

• 1.3550 – June 5th High
• 1.3459 – May 10th/11th Low
• 1.3365 – December 3rd High

GbpUsd Technical View

Cable, same as the Euro, formed a red candle on the weekly charts after 6 consecutive green ones. The pair made a new record high on Tuesday at 2.0653 before sinking about 400 points in the following days. We did mention that a reversal was possible but the strength and speed of it was a surprise, in just 3 days from a record high we have gotten very close to the 2.0200 support line, the pair smashed through 2.0500 and 2.0400 support numbers and halted only at 2.0250. A continuation of the down move will have to break under the 2.0200 support line, and if that happens the next support is April 18th high of 2.0133 before the 2.0000 round number. At this point the 2.0000 level might act as a bear target just as it did when the pair was trading bellow it and the bulls were aiming at it. On a different note, cable might stop its south sharp fall above the 2.0200 support line and either enter into a consolidation period or even reverse back up, if that will be the case all the support levels it broke through will act as resistance. We will continue to analyze price action especially around the 2.0200 level, if it gets that low, and see if this down move has the energy to continue or we have to expect a north reversal.

Resistance Levels

• 2.0700- round number
• 2.0650 – round number

Support Levels

• 2.0360 – July 11high
• 2.0200 – Round number
• 2.0133 – April 18th High
• 2.0060/70 – April 25th High