EUR/USD: Overall down path intact

EUR/USD Technical analysis Nov 17th - Nov 21st

Despite the previous week’s bear rush, EUR/USD opened the week with a small positive Gap over the weekend giving bullish signals from the very beginning of the trading week. However the bulls were not powerful enough to clearly push above the previous week’s main support zone of 1.25 psychological level and traded most of the week on a narrow range until Friday. On Friday after a week-long of attempts the pair finally broke above its 1.25 resistance level and managed to close the week just above the 1.25 level, USD/EUR 0.80 level.

Fundamentally talking, the week had minor developments. Germany q/q prelim GDP figures came at marginal growth of 0.1%, whereas Europe’s troubling founding member France showed 0.3% growth, better than previous expectations. In the US although the Unemployment claims and the JOLTS job opening data came as disappointing, we had an important development; the US “quit rate” rose back to its pre-2008 levels, indicating people’s confidence in finding new jobs.

For the week the pair found its resistance at 1.2530, made lower high, but higher low. As said last week, clear break below 1.2430 support level on weekly timeframe could open the way towards 1.2300 monthly support zone and the anticipated 1.2000 psychological barrier.

On the daily chart, the price structure still remains majorly sideways, below 20, 50 and 100 day Simple Moving Averages and this keeps the overall down path intact. Overall the daily trend can be concluded as bearish however, at this given moment we would not advise entering short entries as we have bullish divergence on both of our indicators and on 4 hour timeframe the pair has broken above the upper boundary of the symmetrical triangle.

Expectations for the upcoming week (Nov 17th - Nov 21st):

From smaller time frame point of view, we can see the pair bouncing off the monthly 1.2300 psychological support zone. Especially given that the pair broke above its symmetrical triangle, we may expect to see price retracement this week towards our monthly pivot line at 1.2635.

Resistance levels: 1.2535 (R1), 1.2615 (R2), 1.2635 (PP) and 1.2750 (R3)
Support levels: 1.2480, (S1), 1.1.2392 (S2) and 1.2357 (S3)

GBP/USD Technical analysis Nov 17th - Nov 21st

Although Cable started the week positively, the pair suffered on Wednesday’s UK inflations report. As the bears kept the British pound under pressure, GBP/USD continued to make lower lows on Wednesday as well as on Thursday and Friday. On Friday the pair touched its 15 months’ low at 1.5592 however the fading bearish momentum lead the pair to rapidly bounce again up towards 1.5660 level and closed the week at 1.5666 levels, lowest daily closing since 9 September 2013.
Although we may expect further bearish power, investors should be open for possible retracement waves as the pair has just bounced of its psychological support zone of 1.56.

Expectations for the upcoming week (Nov 17th - Nov 21st):

At the time of analysis the pair is trading just above its long-lasting support/resistance zone of 1.5666 and all three of our MAs are sloping downwards both on 4 hour and daily timeframes. Meanwhile RSI is breaking above its oversold zone both on 4H and daily timeframes.
As the [air has bounced off strongly from 1.5600 psychological support zone, we may expect the pair testing 1.57 level and if 1.57 level is strongly broken, the pair could open its doors towards 1.5880 and above.

Resistance levels: 1.5768 (R1), 1.5882 (R2), 1.5994 (R3) 1.6039 (PP)
Support levels: 1.5600 (S1), 1.5500 (S2) and 1.5397 (S3)