Euro and Pound Weekly Overview - September 23 close

EURUSD

Last week the markets opened with a downside gap for the Euro-Dollar, briefly closed for a continuation and small breach of the previous week’s lows, as expected in our bearish scenario, and finally ending at about the same price, just above round number 1.3500. I would expect further downside for this pair, targeting the daily 127% extension at 1.3320, then the weekly 161.8% extension at 1.3170, daily 138.2% level near round number 1.3100 and further to the daily 161.8% level at around 1.2860.

GBPUSD

The Pound-Dollar reached a 138.2% extension on both weekly and daily charts, meeting and breaching our target of 1.5350, and rejected from the lows it made at 1.5326 to perform a 38.2% correction on the overall week’s move. Some more retracement could occur to retest the broken support at 1.5630 but the overall tone is strongly bearish and I would expect further extension to 1.5200/1.5150 (161.8% weekly and daily levels respectively).

EURGBP

The Euro-Pound attempted twice to break the previous week’s highs at 0.8790 but failed and was rejected to a 23.6% pullback, closing at almost the same price as Friday 16. I would expect some consolidation between the daily SMA200 and SMA100 (weekly SMA100 and SMA34) before a break of the daily symmetrical triangle formation. Target to the upside is the weekly 61.8% retracement and August highs at around 0.8875/90 and on the downside we would be looking for a breach of this month’s lows around 0.8530 and weekly SMA200.