EUR/USD, GBP/USD and EUR/GBP Forecast – Dollar Fighting Others on Tuesday

EUR/USD Technical Analysis

The euro initially tried to rally a bit during the trading session on Tuesday but gave back those gains as we continue to see more of a fade-the-rally type of scenario. The 50-day EMA is hanging around just above, suggesting that there is not only resistance but maybe a little bit of a downtrend line. If the market were to drop from here, then the 1.15 level would be a support level, followed by the 1.14 level. The 200-day EMA is near the 1.14 level, so I think ultimately this is a target and support. Anything below there opens up the trap door to the downside.

GBP/USD Technical Analysis

The British pound has rallied initially during the trading session on Tuesday as well, but we continue to see the 1.32 level cause a bit of a headache, with the 50-day EMA dropping toward the 200-day EMA, which is just above the 1.32 level. Ultimately, I do think the British pound will eventually go to the 1.30 level. If we break down below the 1.30 level, then the market could go looking at the 1.2750 level. This is a market likely to continue to see a lot of downward pressure in general. But all things being equal, this is probably more of a grind in favor of the US dollar, as the Bank of England came awfully close to cutting rates at the last meeting.

EUR/GBP Technical Analysis

The euro has turned around to show signs of life and is looking very much like a market that will continue to see a lot of upward pressure against the British pound. The market will eventually go looking to the 0.89 level, which is the measured move of the previous consolidation range we had been in. The 50-day EMA sits near the 0.8750 level, which was previously resistance and should now be support. Ultimately, I do think we continue to see a lot of buyers, and this is a market I have no interest in shorting, as the pound itself is so weak overall.

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