EURGBP TECHS: Retracement Mode

• RES 4: 0.8474 High Jan 20 and a key resistance    
• RES 3: 0.8420 76.4% retracement of the Jan 20 - Feb 3 bear leg  
• RES 2: 0.8388 61.8% retracement of the Jan 20 - Feb 3 bear leg  
• RES 1: 0.8347/78 50-day EMA / High Jan 6 and pivot resistance   
• PRICE: 0.8297 @ 16:09 GMT Feb 18 
• SUP 1: 0.8284/8248 Low Feb 18 / 3 and a bear trigger
• SUP 2: 0.8223 Low Dec 19 and a key support  
• SUP 3: 0.8203 Low Mar 7 ‘22 and a lowest point of a multi-year range   
• SUP 4: 0.8163 123.6% retracement of the Dec 19 - Jan 20 bull leg 

EURGBP traded lower Monday but - for now - remains inside a range. The early February bounce still appears to have undermined a recent bearish threat. Attention is on 0.8378, the Jan 6 high and a key short-term pivot resistance. Clearance of it would strengthen a bullish condition and signal scope for a stronger recovery. For bears, a resumption of weakness would once again refocus attention on 0.8248, the Feb 3 low and the bear trigger.    

The top House Democrat super PAC is circulating a memo laying the groundwork for Democrats to hammer Republicans on potential cuts to Medicaid. The success of the campaign may be consequential to the GOP's ability to find sufficient offsets to fund President Trump's tax agenda. 

• The memo states: “While Donald Trump and House Republicans promised to ‘love and cherish’ Medicaid, House Republicans have gone full Matt Bevin, and are planning to make deep cuts to fund $4.5 trillion in tax cuts for Elon Musk and other billionaires,”
• Punchbowl News notes: “Bevin, the former Republican governor of Kentucky, lost reelection to Democrat Andy Beshear in 2019 on the heels of an attempt to overhaul statewide Medicaid benefits. Democrats believe there is a similar opportunity to win seats in deep-red territory by capitalizing on voter anger over GOP entitlement reforms, especially if those funds are used to offset tax cuts.”
• The memo notes: “A clear majority of voters—including Trump voters—oppose House Republicans’ plan to cut Medicaid: “76% of voters have a favorable opinion of Medicaid and 82% see it as an important source of health coverage.
• “78% of Americans disapprove of making major Medicaid cuts, including 67% of Trump voters.
• “66% of voters say they would feel unfavorable about Republicans in Congress if they push for large cuts to Medicaid this year.”

Figure 1: Opinion of Medicare, Trump Voters (Democrat-Affiliated Survey Data)

Source: HART Research 

• RES 4: 1.2811 High Dec 6 
• RES 3: 1.2767 50.0% retracement of the Sep 26 ‘24 - Jan 13 bear leg 
• RES 2: 1.2667 High Dec 19
• RES 1: 1.2635 High Feb 17
• PRICE: 1.2615 @ 16:08 GMT Feb 18
• SUP 1: 1.2466 20-day EMA     
• SUP 2: 1.2333/2249 Low Feb 11 / 3 and a key short-term support
• SUP 3: 1.2161 Low Jan 17 / 20
• SUP 4: 1.2100 Low Jan 10 and the bear trigger   

A bull cycle in GBPUSD remains in play and the pair is holding on to its recent gains. A recent breach of resistance at 1.2550, the Feb 5 high, confirmed a resumption of the current uptrend. Furthermore, 1.2610, 38.2% of the Sep 26 ‘24 - Jan 13 bear leg, has been pierced. A continuation higher would strengthen current conditions and open 1.2767, the 50.0% retracement. Key short-term support is 1.2333, the Feb 11 low.