Recent market movements have created interesting patterns in both EUR/USD and GBP/USD.
What are the next levels in both currency pairs? JP Morgan answers:
Here is their view, courtesy of eFXnews:
Having decisively broken key-Fib.-support at 1.2592 (minor 76.4 %), JP Morgan now sees the odds in favor of a straight resumption of the broader downtrend, but the risk of only dealing with an overshooting countertrend decline persists.
That said, JPM thinks that a decisive break back below 1.2502/00 (76.4 % on higher scale) would confirm lower targets at 1.2418 and 1.2218 (Fib.-proj./w. trend).
“We nevertheless see a negative bias prevailing as long as the hourly lagging line doesn’t display two consecutive higher closes above Ichimoku-resistance (currently at 1.2729),” JPM argues.
In Cable, JPM notes the market keeps on defending key-support at 1.5948/44 (minor 76.4 %/pivot) which keeps the inverted H & S bottoming pattern in the game and the door for a broader recovery open.
“For the latter to receive additional support though, it would now take breaks above hourly Ichimoku-resistance with the lagging line (now at 1.6136) and ultimately breaks above pivotal resistance between 1.6186 and 1.6228,” JPM projects.
“A break below 1.5944 would on the other hand challenge 1.5854 and 1.5752 (pivots), if not 1.5374 (76.4 %),” JPM adds.
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