Both major pairs have interesting patterns emerging on them. The team at RBS explains:
Here is their view, courtesy of eFXnews:
The EUR/USD medium-to-long technical picture has been bearish for a while with a bear flag triggered pointing to the targets as low as 1.05 and 1.01 (with a possibility of extending a dip to 0.96 on a long-term horizon), notes RBS.
However, RBS also notes the EUR/USD near term technical picture is quite different with a sideways theme being in place for two month and 1.0950/81 marking a key resistance area and a bullish flag trigger.
“If the 1.0981 level is broken, the EUR/USD would tactically become bullish to 1.1073 on to 1.1147 and possibly even the main resistance of 1.1220,†RBS argues.
“Therefore we exit any shorts and stay flat for now awaiting confirming signals,†RBS advises.
Turning to GBP/USD, RBS thinks that the pair may have already seen a base around 1.4075 as inverted H&S triggered and support remains intact.
“This view has been confirmed, as the pair failed to break below 1.4075 Fibonacci swing extension and formed an inverted Head and Shoulders pattern (and accomplished a return move to the neckline level) targeting 1.4547 on to 1.4657,†RBS adds.
Therefore, RBS recommends loading tactical longs to 1.4547 on to 1.4657 with a s stop on a close below 1.4180 (right shoulder level = risk level).Â
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