Euro and Pound Weekly Update - Jan.14 close

EURUSD

Last week, price retraced to the 38.2% Fibonacci level and closed at the middle line of the Bollinger Bands. Still in its symmetrical triangle formation, with all moving averages flat, there is a possibility for the price to continue further to the upside and test SMA100 at 50% retracement (1.3590-1.3640) with next targets being the SMA200 as second step and previous highs near 1.4300 on a longer term view. Daily charts are bearish and trading near the top Bollinger Band, we could see an extension to 1.2550 level but in my opinion the pair will most probably continue inside the falling wedge, ranging between 1.3500 and 1.2900.   

GBPUSD

The Pound-Dollar bounced up from the lower up-trend line on weekly charts, while breaking level 1.5600 to the upside on daily time frame. We are trading above SMA100 and a continuation to the upside would be expected after a retest of previous highs at around 1.6300. We could be having an inverted head and shoulders pattern in formation on daily, with a projection to 1.6300/20. Price has crossed the three moving averages. However in this case we would have to revisit the 1.5600 level where SMA34 lies at Friday close, for the formation of the right shoulder before the final push up to the highs after a break of the neckline at around 1.5840.

EURGBP

This pair is continuing the formation of a symmetrical triangle on weekly charts, and went back up for a retracement to the 50% Fibonacci level on Friday, where price was rejected at the confluence of SMA34 and SMA200. I would expect a new attempt to break this level and test the highs at 0.8650/55, and a tightening of the range before the weekly triangle breaks. This level (0.8630/50) is a strong resistance and given the overall bearish tone of the pair we might revisit the previous lows after the retest. If the level gives way to the upside, the next targets to watch would be the 127% and 138.2% extensions (0.8750/0.8800) on the daily time frame, and previous highs at 0.8940 on weekly.