GBPUSD outlook for the week of July 19-23

GBPUSD did very well last week until Friday. It reversed it’s bullishness and dropped over 150 pips from it’s Thursday high. If you look at the chart below, you will see why? GBPUSD recovered almost 100% of it’s Fibo retracement from it’s May 17th low of 1.4249 to April 26th high of 1.5495.
So, 1.5495 becomes a resistance at this point. GBPUSD need to break this level to go higher.

Next week's strategy for GBPUSD:

We will be watching that resistance level to go long, if any breakout happens. Ofcorse, we have to be careful for any false breakout. Trend is still bullish until we see it goes below 1.5235.

On economic calendar, there is a very important news for GBPUSD and that is

British GDP: released on Friday at 8:30 GMT.

After lagging behind other countries, Britain saw two quarters of growth. Last quarter’s 0.3% growth rate which was confirmed just last week, will probably be followed by a stronger growth rate in Q2. We’ve seen better numbers at the unofficial NIESR release. Note that the preliminary release, like now, is usually worse than the final outcome. A growth rate of 0.6% is expected now.

Next week will be very interesting to watch GBPUSD for any clue of reversal.

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GBPUSD Daily Chart

Euro/Usd Midweek Update

Even though, German Zew Report came worse then expected Euro went higher against US dollar today. The reason more likely overall risk averse sentiment going positive towards EURO and GBP.

On our previous blog we talked about 1.27 resistance for Euro and today Euro broke that level and went higher.
Now, we are looking for next big resistance at 1.3124 which is 38.2% fibo (Please read previous blog). It will not happen overnight but we don't see any big resistance before that on a daily or weekly chart.

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Where will be Euro next week?

Looking at the daily chart, we can see EUR/USD touched the top side of a down channel which started from December 2009.


We will be watching this level (1.2700). If it can break and go above that level then the next level will be 1.3124 which is also a 38.2% Fibo from high of 1.5137 and low of 1.1881.

We are holding neutral bias at this critical point.

Next week’s important news for Euro will be German ZEW Economic Sentiment: Published on Tuesday at 9:00 GMT. This can move the currency in either direction.

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