Inter-day Forex Analysis – Daily Charts – February 23, 2017


EURGBP – Daily Chart

EURGBP - Daily - 22.02.2017

As suggested in our last inter-day analysis, the EURGBP has moved lower and is nearing a horizontal support at 0.8350. Shorting opportunities could exist if price moves below the horizontal level or if price re-tests the consolidation (diagonal) resistance area. The moving averages are moving sideways, suggesting that the EURGBP could potential range within the horizontal channel at 0.8350-0.8830.

The British Prime Minister has announced that Article 50 will be triggered by the end of March 2017. Most economists did believe that sterling would continue to weaken long-term but there now exists more optimism for the British pound. British Prime Minister Theresa May has provided Brexit negotiation details and announced what deal the UK government would like as they leave the EU. This has given strength to the GBP.

EURUSD – Daily Chart

EURUSD - Daily - 22.02.2017

Price is ranging within a horizontal channel at 1.0385-1.0800. Trading opportunities could exist around the range support and resistance areas and if the EURUSD moves out of the range (break-out trade). The moving averages are bearish and steady, suggesting that price could move lower and test the horizontal channel support area. Selling opportunities could exist around the bearish moving averages.

The future of the Euro is very unclear (not uncertain, just indecisive). Some economists are expecting a 1.0000 parity between the Euro and US Dollar. The US Federal Reserve recently raised interest rates to 0.75%. The US Dollar could continue to strengthen long-term, as further rate hikes are expected.

GBPUSD – Daily Chart

GBPUSD - Daily - 22.02.2017

The GBPUSD has moved off the horizontal resistance area around 1.2735 and continues to range within the identified horizontal channel (as suggested in yesterday’s chart analysis). The moving averages are tight and moving sideways, signalling the current market indecision. Trading opportunities could exist around the range support and resistance and if price moves out of the range (break-out trade). There is a possibility that the GBPUSD is forming an inverted head and shoulder pattern and that price could move higher.

The British Prime Minister has announced that Article 50 will be triggered by the end of March 2017. Most economists did believe that sterling would continue to weaken long-term but there now exists more optimism for the British pound. British Prime Minister Theresa May has provided Brexit negotiation details and announced what deal the UK government would like as they leave the EU. This has given strength to the GBP. The US Federal Reserve recently raised interest rates to 0.75%. The US Dollar could continue to strengthen long-term, as further rate hikes are expected.