Euro and Pound Weekly Update - Feb. 25 close

EURUSD

A little higher than previous week but still inside the boundaries of the weekly symmetrical triangle, the Euro-Dollar nearly reached January highs and closed just above the SMA100 level. On the Daily charts, we could be having a double top but there is still room for a break to reach the extension at 127% or 138.2% with a target at the psychological number 1.4200 just in-between, and another target set at the previous weekly highs nearly 80 pips higher. On the downside, we have the possibility for a retest of the ascending trend line and SMA34/SMA100 confluence at around 1.3580 though we are presently trading above the support line at 1.3750 and I would favor the continuation to the upside.

GBPUSD

The Pound-Dollar ended on a daily pinbar and a weekly double-top. This week opened with a small gap down which has already been recovered and we are now trading at the same level as Friday close. On smaller time frames (4 hour-chart) we seem to be having a bottom forming and the outlook is bullish, expecting a break of the double-top level to reach at least the 127% weekly extension which is near the upper line of the ascending channel. On Daily, I would be targeting near round number 1.6600 after a break of 1.6300. Should we fail to break the top, I would expect a pull back to psychological number 1.6000. We have a strong support a little above, at 1.6030.

EURGBP

The Euro-Pound closed last Friday at the confluence of the middle line of the weekly Bollinger bands and 38% Fibonacci retracement, while it showed some rejection from the upper band on Daily charts after reaching above the 61.8% retracement, which I believe was not more than a retest of the SMA100 level, broken last Thursday. We seem to have an inverted head and shoulders on the weekly charts, and the scope for a break of its neckline would be a retest of October 2010 highs at 0.8945. On a shorter term, I would expect a continuation to the upside to the previous highs at 0.8670 after a break of the high reached on Friday and upper line of the weekly triangle.