EUR/USD, GBP/USD and EUR/GBP Forecast – Dollar Slips a Bit in Early Monday Trading

EUR/USD Technical Analysis

The euro initially did pull back just a bit during the trading session on Monday, only to turn around and show signs of strength. All things being equal, though, this is a market that is in the short-term consolidation area after breaking down below a trend line at the end of the day. And this is a market that still continues to see a lot of resistance near the 1.17 level, which is a large round, psychologically significant figure and an area that I think a lot of people will be watching for signs of weakness.

If we break down below the 1.1550 level, then the market is likely to drop to the 1.14 level, a large, round, psychologically significant figure and an area that has been important for a while, as the 200-day EMA sits right in that general vicinity.

GBP/USD Technical Analysis

The British pound rallied a little bit during the trading session here on Monday as well, as it looks like the 1.34 level is coming into the picture for potential support and resistance as it is in the middle of the larger consolidation area. Rallies that appear here and show signs of exhaustion are more likely than not going to be sold into, with the 1.35 level being significant resistance as it is the same place that not only do we see a large, round, psychologically significant figure, but also where we start to run into the uptrend line that’s now been broken. If we drop from the 1.35 level, then we could head back to the 1.3250 level, possibly the 1.32 level.

EUR/GBP Technical Analysis

The Euro has pulled back slightly against the British pound during the trading session on Monday, with the 0.8750 level offering resistance yet again. At the end of the day, this is a market that I think continues to see the 0.8750 level as a major barrier. So, if we were to break above there, then we could go much higher. A short-term pullback to the 50-day EMA is possible, with the 0.8684 level offering a little bit of support. Anything below there, then we could go looking at the 0.86 level, where the 200-day EMA is trying to get to.

This is a positive market overall, but we have such a major amount of resistance above that it is going to be difficult to ultimately have to make some type of bigger decision. Keep in mind that this pair is typically very choppy. So, at the end of the day, this is a market that I think you use as an indicator of how to trade the euro or the pound against the US dollar based on relative strength.

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