JPM thinks that the British Pound is also far from reversing its general up-trend as the latest bounce in EUR/GBP has not even managed to come close to crucial resistance between 0.8304 (minor 76.4 %) and 0.8346/51 (daily trend/pivot) yet.
“Below, the downside remains wide open for a straight extension to 0.8096 and 0.8005 (Fib.-projection/int. 76.4 %).The defence of minor 38.2 % Fib.-retracements at 1.6613 in Cable and at 168.86 in GBP/JPY so far is also suggesting that at least one minor new high is missing in the broader up-trend,” JPM projects.
“For the latter to be confirmed it however takes a decisive hourly close above key-Fib.-resistance at 172.27 (minor 76.4 %, i.e. above 173.00) in GBP/JPY,” JPM adds.
The recent price action strengthens the general idea that the latest USD setback is pretty much done without breaking key-support between 79.816 and 79.584 (weekly trend/int. 76.4 %) in the USD index and key-resistance between 1.3795 (int. 76.4 %) and 1.3833 (pivot) in EUR/USD, notes JP Morgan.
That, according to JPM, suggests that a broader USD breakout looks to be looming which would however require confirming clear breaks above 80.429 (minor 38.2 %) in the USD Index or below 1.3693/63 (minor 38.2 % on 2 scales) in EUR/USD for the USD bulls to be on the safe side.