Euro and Pound Weekly Update - April 15 close

EURUSD

The Euro-Dollar rose last week above previous week’s apparent double top and made new highs, bringing the weekly rising wedge to a steeper angle. Against our main expectations of two weeks ago, price indeed broke the monthly bearish trend line and November 2010 highs, rising to 1.4520 level from where it is presently doing a small correction. Last week was a consolidation period between 1.4360 and 1.4520 and we are getting close to the rising daily trend line at 1.4330/40 (also the daily 38.2% retracement level). Although a continuation to the upside seems possible, I would vouch for a correction to the 38.2% weekly Fibonacci level at around 1.4120 and SMA200, if this strong support price is presently sitting on is finally broken. Next target level would be 1.4275/50 around March highs and middle line of the daily Bollinger bands. Should actual support level hold, we would be aiming in extension towards round number 1.4700, between the daily 127% and 138.2% levels.

GBPUSD

As we were expecting in our analysis of two weeks ago, the price for the Pound-Dollar climbed back to the highs at 1.6400, where it has been encountering a significative resistance. I still see some more upside eyeing 1.6600 and 1.6700 levels, should the actual top give way. On daily charts, it has made a correction to the 38.2% Fibonacci zone and has been in consolidation between the 1.6390 and 1.6225 levels. There is a confluence of the daily SMA34 and middle line of the Bollinger bands, and if the actual lows at 1.6225 are broken, we would be targeting the SMA100 and previous March lows at around 1.5950 and round number 1.5900.

EURGBP

It would seem we might be having a double top on the weekly charts, with price ending on a bearish doji candle and pin bar for two consecutive weeks. On daily we are still inside the ascending channel with price holding above the support at the 50% Fibonacci correction level (0.8820- round number 0.8800). It is presently attemtping again to break these lows and sitting on the middle line of the daily Bollinger bands at 0.8814. Next target if the break occurs would be the daily SMA34 around 0.8720 at early April lows, with a possible extension to 0.8600 in average inside the 0.8640-0.8570 weekly retracement zone (50%-61.8% levels). Some struggle is expected at the SMA100 (now at 0.8675).