Euro and Pound Weekly Update - March 25/29 close

EURUSD

As expected in our previous forecast, the Euro-Dollar went upside to the 138.2% extension three pips short of the target at 1.4250 earlier last week, bouncing then from the resistance to reach 1.4050 and mostly ranging between 1.4230 and 1.4050/60 for the rest of the week. For the last three days this range has tightened and a retest of the break a little below 1.4030 was done on Sunday, while the price has been evolving between 1.4150 and 1.4050. I still expect a break or at least a test of round number 1.4300 and former weekly highs, with potential for an extension to 1.4380/1.4400. On the bearish side, we could see a fall to the round number at 1.4000/1.3980 and weekly SMA200 but I would favor the bullish view given that it has been building a strong support above the 1.4030 broken level.

GBPUSD

The Pound-Dollar did continue on the bullish side at the beginning of last week but failed to reach the extension and bounced from the round number at 1.6400, giving back all the gains of the previous week and closing near the daily lows. This week the price made a new low but seems to be recovering from the daily SMA100 level, and I would expect another attempt to revisit the highs, or at least a 50% Fibonacci retracement on this fall towards 1.6180 and daily SMA34 as a first target.

EURGBP

The Euro-Pound pulled back to the ascending trend line at 0.8650/60 as forecasted and reacted then back to the upside, reaching the round number 0.8800, 30 pips above our expected target at the 138.2% extension on the daily swing high. It has since been making new highs early this week, and seems now aimed again towards the lower trend line at 0.8720. A break below would bring us back to the previous level where there is a strong area of support (0.8640/70) and present level of the daily SMA34. Next target would be 0.8520/00 and the confluence of SMA100 and SMA200.