EUR/USD runs to the upside; next resistance at 1.2090
EUR/USD is completing a tremendous upside movement over the last three days and has appreciated more than 1.4% since December 27. The new year has found the pair extending its upside pressure and opening today’s daily session with a gap up, posting an almost 4-month high at 1.2038.
Also, the price opened the door for a gaining week and on the upside, the next resistance comes in at 1.2090, while on the bigger picture, we could easily see a run until the 1.2400 strong psychological level. The aforementioned obstacle is the 161.8% Fibonacci retracement level of the last big down-leg with high at 1.1615 and low at 1.0340.
Conversely, support lies at the 1.1960 level where a violation could push the price further down at the 1.1710 level. It is worth mentioning that the world’s most traded currency pair needs to go through the 50- and 100-day simple moving averages before it slips.
Remaining on the short to medium-term timeframe the Relative Strength Index (RSI) has turned sharply higher and is approaching the overbought area, while the MACD oscillator is endorsing the rising move too on price as it is holding above its trigger and zero lines.
All in all, EURUSD faces further upside pressure in all timeframes. The price recorded the second bullish month in a row as well as the second consecutive green week successfully surpassing the 1.1960 level.
GBP/USD has room for more upside following the break above 1.3500
GBP/USD has held a neutral bias since late November, trading in a range between 1.3300 and 1.3550. The outlook is neutral as long as the market remains in the resistance zone between 1.3500 and the September 20 peak of 1.3656.
Near-term risk is to the upside after GBP/USD bounced off 1.3300, a level that was tested a few times in mid-December, proving to be a strong support level. If this support holds, more sideways trading is expected in the near term until prices make a sustained break above 1.3656. Support is seen at 1.3300 (50-day moving average). A drop below this support would target further support at 1.3000. Any move lower would change the short-term neutral bias to a more bearish one.
Momentum is bullish and RSI is rising. The 50-day and 200-day moving averages are positively aligned. As long as the market remains above these, there is room for further upside. In the bigger picture, GBP/USD is expected to remain steady in a broad, choppy range between 1.3000– 1.3500, as the pair consolidates after the rise from the 1.2000 area.
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