Euro and Pound Weekly Update - April 22 close

EURUSD

The Euro-Pound made a correction last Monday which almost reached our expected target at the former 38.2% weekly Fibonacci level and went inmediately back up for the rest of the week, making new highs near the 127% extension of the previous daily swing high. Friday ended on a small doji after a strong rejection from the highs, and though a new bullish attempt could manifest, I think we can expect another leg down towards the lows for this week, targeting the middle line of the daily Bollinger bands as first step (around 1.4330). On a medium-term approach and if the bears come back in force, we would be aiming to reach the weekly lows and 38.2% Fibonacci retracement at around 1.4150/20, then a continuation to the round number 1.4000 and weekly SMA200 for a retest of the previous break.

GBPUSD

The top level formed two weeks ago did break and the Pound-Dollar made new highs, although the round number 1.6600 wasn’t reached. Price made a 127% Fibonacci extension on the daily swing high, and we have a very similar Friday candle as EURUSD’s, signaling market exhaustion. There is still room to the upside and we could have another attempt at the round number level and last week’s expected targets, but if price fails to break Thursday’s highs we will be seeing a retest of the break at around 1.6430. I think that level should hold for a bullish continuation of this pair, however if it doesn’t, next target on the downside would be around 1.6260/50 and on a longer term approach, the weekly middle line of the Bollinger bands at the psychological level 1.6000.

EURGBP

The Euro-Pound made a correction to the daily SMA34 at the beginning of the week as expected, making a higher low on the daily charts. Price went back up reaching lower highs, which gives us a triangle pattern and 100-pip range to break between 0.8780 and 0.8880. On the weekly charts, we can appreciate that this is the third consecutive week ending on a potentially bearish pattern, and we could assume that the previous week’s pin bar has been confirmed and we are possibly heading down. I would be targeting the 127% daily extension of the last daily swing high range (0.8660) and weekly SMA100 (0.8680) where there is a strong support area and the approaching confluence of the middle line of the Bollinger bands and SMA34. The lower point I see for this fall is the round number level 0.8600 where the pair could regain strength for another bullish ride.