Euro and Pound Weekly Update - Feb. 18/23 close

EURUSD

The Euro-Dollar has been trading inside a symmetrical triangle formation and ended last Friday at the weekly SMA100 level, barely above the middle line of the daily Bollinger Bands, also with a similar formation. I would expect a break to the upside towards the previous daily highs at around 1.3860 as first target, and then a further bullish continuation up to the weekly SMA200 at around 1.3960 which is also the upper descending trend line of the triangle. If this level also breaks, we would be aiming to a retest of previous weekly highs of early November 2010.

GBPUSD

Pound-Dollar has been in a steady uptrend in a weekly ascending channel, and ended last Friday at a level that could be considered as a potential double top. At today’s close, we are still hovering around that level which seems to be holding. We also have a double top formation on the daily charts, and I would expect some correction down to the daily 38.2 Fibonacci retracement and SMA34 level, with possibility of a break down further to reach the confluence of the weekly SMA34 and SMA100 at around 1.5750. A continuation to the upside if the present resistance breaks, would lead us towards 1.6500/1.6600 in extension and top of the weekly channel.

EURGBP

The Euro-Pound ended on a doji just below the weekly SMA34 and the pair is also trading inside a symmetrical triangle. On daily charts we have a sideways move and a Friday close just below the confluence of the SMA34 and SMA200. Despite the bearish outlook, this pair has continued its rise after the week-end and is now inside a tight range formed by the confluence of the three moving averages, closing above the middle line of the daily Bollinger bands. I would expect some stalling at that level but the odds are for this pair to continue rising towards 0.8550/0.8670 to meet previous weekly highs and SMA100.