EUR/USD, GBP/USD and EUR/GBP Forecast – Dollar Strengthens Slightly in Early Thursday Trading

EUR/USD Technical Analysis

The euro has drifted lower during the early hours here on Thursday as we continue to see a lot of negativity. The 50-day EMA continues to be a bit of a barrier. So, it’s not a huge surprise that we really couldn’t take off to the upside. If we can break down below the 1.1550 level, it opens up a deeper move to the downside, possibly down to 1.14, where the 200-day EMA awaits. Otherwise, we’d probably go sideways.

GBP/USD Technical Analysis

The British pound has dropped a little bit during the trading session in the early hours as well, as we are still stuck between the 50-day and the 200-day EMA indicators, which generally means volatility. All things being equal, though, the British pound had, over the last two years, outperformed most of its contemporaries against the US dollar. So, if it starts to fall, I think that shows real US dollar strength. And this can be used more or less as an indicator.

On the chart, we have the day that is circled, representing the FOMC interest rate decision and press conference. The US dollar has done pretty much nothing but strengthen since then, although again, the British pound has put up a bigger fight against it than many others.

EUR/GBP Technical Analysis

The euro is slightly stronger against the British pound during the trading session on Thursday, but at this point in time, we continue to move sideways, right around the 50-day EMA. The 50-day EMA sits in the middle of a larger consolidation area, with the 0.86 level on the bottom and the 0.8750 level on the top representing your support and resistance areas. Ultimately, this shows the neutrality between these two currencies as of late.

So that’s why they’re moving in tandem against the US dollar, or at least it helps you determine that one is not particularly stronger than the other. Ultimately, though, when I look at this chart, once we break out of this range, we should have a fairly decent move on our hands. Range-bound traders right now continue to bounce around about a 40 pip range.

For a look at all of today’s economic events, check out our economic calendar.