EUR/USD: Euro resists near to 0.97 but for how long?
(Vasilis Tsaprounis – TopFX)
The common European currency trades on either side of the 0,97 level looking for direction after a day of soft trading.
The absence of major macroeconomic news and the holiday in the United States due to Columbus Day limited the trading range yesterday and the pair is left trading either side of the 0.97 level with limited divergence.
Today is not much different as the absence of major macroeconomic announcements is also a today’s feature and the important announcement of the latest Fed minutes due tomorrow afternoon is likely to limit investors from taking significant positions.
The main data weighing on the euro continues to be at the fore with geopolitical tension remaining high curbing investors’ appetite for increased risk , thus driving needs to buy dollars as a safe haven currency.
US bond yields remain on attractive levels and bets that the US Federal Reserve will maintain an aggressive rate hike policy remain high.
On the other hand, all these data have been in the foreground for a long time and have been digested to a large extent by the markets and for this reason the pair is sensitive to reactions.
The barrage of missile attacks on the Ukrainian front as well as the targeting of buildings of European interests in Kyiv raise concerns about further escalation.
In such an environment and with the tendency to remain mildly bearish the US currency seems to be favored but its momentum has been quite limited, with the common European currency again looking for a way for a new strong reaction.
I will remain focus to the main strategy for buying the euro on the new dips which has not disappointed me so far.
GBP/USD: The bearish trend may end near 1.030
(Jing Ren – Orbex)
The structure of the GBPUSD currency suggests the formation of a global corrective trend – a triple zigzag w-x-y-x-z. On the 1H timeframe, we see the final actionary wave z of the cycle degree.
The wave z most likely takes the form of a primary triple zigzag Ⓦ-Ⓧ-Ⓨ-Ⓧ-Ⓩ. Perhaps at the beginning of August of this year, the bullish price movement ended within the small primary intervening wave Ⓧ, it took the form of an intermediate zigzag (A)-(B)-(C).
After that, we saw the continuation of the bearish trend in the primary wave Ⓩ, which may complete its intermediate triple zigzag pattern (W)-(X)-(Y)-(X)-(Z) near the 1.030 mark.
At that level, wave Ⓩ will be at the 100% Fibonacci extension of previous actionary wave Ⓨ.
It is possible that the cycle wave z could be fully completed, it has the form of a primary triple zigzag, as suggested above.
Thus, in the last section of the chart, we see that the bulls have started to move the price in a new trend.
Perhaps in the next coming trading weeks, market participants will observe the construction of the first impulse wave Ⓐ of a potential zigzag Ⓐ-Ⓑ-Ⓒ of the primary degree.
The end of the impulse Ⓐ is expected near 1.1957. At that level, intermediate sub-waves (3) and (5) will be equal.