GBP/USD: Dollar continuing to drive cable south

By Michael Baker

GBP/USD

Pivot: 1.2615

Scenario 1: Dollar strength continues to drive cable south, we are on the brisk of testing long-term trend support at 1.2565. Possible it will not hold this time round, this could leave open the May low at 1.2559. Yearly lows at 1.2480/34.

Scenario 2: 1.2662 saw a strong reaction when it broke on Friday morning, we may see resistance between here and the weekly pivot at 1.2641. The main area bulls will want to beat is the 23.6% at 1.2748, this area has been in control since 17 May. Any higher then it’s the May breakdown between 1.2852/65 with the 38.2% only a few pips higher at 1.2873. 200-day SMA at 1.2939 followed by the 50% at 1.2855. 

Chart: Daily chart shows prices falling south, another test of the long-term support.

17 GBP

EUR/USD

Pivot: 1.1234

Scenario 1: Dollar dominating against the basket. We are testing the 6 June lows and 61.8% fib at 1.1199. Fallen below the 50-day SMA and we are now back within the 1.1214/1.1175 area of price action. June lows at 1.1160, yearly lows are at 1.1118/1.1105.

Scenario 2: Looking very weak but if we can get back above 1.1252 (weekly pivot) and 1.1290 (Friday high) then we build a move for the June highs at 1.1334/47.

Chart: Four-hour chart showing push down on the 61.8% fib. Have seen a strong pullback, chances of a FED rate cut on Wednesday stands at 17.5% (CME Fedwatch Tool).

17 EUR
Germany 30

Pivot: 12,116

Scenario 1: 
Since we gapped up on the 10 June we have held 12,051 support. Looking for a quick test of 12,035, 11,927/884 contains a previous weekly pivot and untested 38.2% fib. 

Scenario 2: Weekly and daily pivot between 12,116/129 holding most of the action at the start of the weeks European session. A trend resistance zone sits within 12,186/225 which has been holding daily highs since 22 May. 12,322 is the 6/16 May highs, 12,356 is potential trend resistance.

Chart: Daily chart showing potential trend resistance.

17 Dow
Wall Street

Pivot: 26,090

Scenario 1: Equities not given much away. Action has been sideways but we can see a trend resistance developing on the 4-hour chart through the highs, 26,187 is the break. 26,199/268 is resistance which held last weeks high. If we start to see the strength come in then we could target the 3rd/6th May highs between 26,479/548 which also contains a market gap.

Scenario 2: To the downside sellers looking to break short-term trend support at 26,059/25,992. From here its 25,961/828 which includes last weeks low, 23.6% fib and the 7th June break out area. 25,730 to the 38.2% at 25,633 sits in front of the weekly pivot at 25,563.

Chart: Four-hour chart showing the recent support and the developing trend resistance. 

17 Dow

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