The two day rallies in EUR/USD and GBP/USD have pushed both back above the bottoms of their recent ranges. Both pairs appeared to break down last week but the rebounds have surely made the technical shorts nervous with their renewed strength.
In EUR/USD, Monday’s close of 1.3483 is below the low close of 1.3507 from the previous range. The failure to close in the previous range comes after an intraday high of 1.3527. The rise above 1.3500 was very light trading early in the session and was likely a leveraged effort to squeeze out the shorts.
Technically, however, it’s a failure so it’s bearish. Overall, it’s a mixed picture and a dicey trade but the bias still has to be for USD strength. Things might get very interesting on another break above 1.3500.
Cable looks more bullish on the daily chart that EUR/USD. We closed at a fresh low on Thursday but were unable to break below the 1.4787 low from the final day of February. We tured lower on Friday but ultimately closed with a minor gain. The bullish setup was completed with the rally above Thursday’s high on Monday. Up next is the psychological barrier at 1.5000. We will need to see a close above here before the coast is cleared for a push toward 1.5378.