Euro and Pound Weekly Overview - July 22 close

EURUSD

Still on a rising trend, last week the Euro-Dollar confirmed the previous week's pin bar, bouncing from the confluence of the three moving averages (34, 100 and 200) at a 50% fibonacci retracement from the swing high. I would be aiming the pair to reach the previous highs and upper Bollinger bands at around 1.4950 as first target, and expect an extension to a 127% if the double top is broken, to attain the top of the ascending channel and round number (1.5500/1.5520).

On the daily charts we are on a slight pullback forming a descending channel with price getting very near the top. A second attempt towards the lows around 1.3850 would be possible before resuming the uptrend, should the upper trend line hold or even form a double top at the previous highs around 1.4590. If this scenario plays out, a push through the lows down to a 127% extension and bottom line of the channel could be on the lines, but given that the overall trend is bullish we could also consider the formation of an inverted head and shoulders pattern with the neckline at the level of the previous highs and therefore the downmove wouldn't go much lower than the 50% or 38% retracements on the previous swing low (1.4218-1.4131). Price ended on Friday above the confluence of the 34 and 100 SMA which can hold for a continuation to the upside.

GBPUSD

Another bullish week for the Pound-Dollar, which evolves inside a consistent ascending channel and is presently between the falling SMA200 and flat SMAs 34 and 100, where the previous pull back reached the 61.8% Fibonacci level and bounced back to the upside. I would be looking for a continuation of the rising move towards the upper trend line of the channel and SMA200 level in the area between previous highs and channel top (1.6770/80 - round number 1.6900).

The descending channel that was formed by the recent pullback on daily charts was broken as well as the SMA100 and we might look for a retest of this break previous to a continuation towards an extension to round number 1.6500 or 1.6550/60 (Fibonacci levels 127% and 138.2%). Price ended on Friday above the three moving averages which are at present mostly flat, and we could expect some consolidation between the highs attained and the broken resistance at 1.6200 prior to resuming the uptrend.

EURGBP

Definitely on the rise, the Euro-Pound pulled back from its previous week fall to the ascending trend line and confluence of SMAs 34 and 100. Price closed barely above the middle line of the Bollinger bands, at a 61.8% Fibonacci retracement level from the previous swing high. I would expect a bullish continuation to at least the 50% of the move as a first target, which would bring us around 0.8900, and a retest of the highs near 0.9100 as a second step on a medium-term approach.

Price has been evolving sideways in an expanding channel and closed on Friday just above the SMA100 and still below the SMA34 and middle line of the Bollinger bands, which are presently at a 50% of the swing low. A break of this level would be needed to expect a continuation to the upside first to 0.8940/80-0.9000 (61.8% Fibonacci retracement and resistance area of early June highs and early July consolidation), then we might attempt a retest of the highs as expressed above.