EUR/USD, GBP/USD and EUR/GBP Forecast – The US Dollar Looks to Recover on Friday

EUR/USD Technical Analysis

The euro looks like it is trying to do what it can to reach the 1.18 level, but it is struggling a bit. Questions need to be asked as to whether or not the market is actually ready to break out. If the 1.18 level were to break, that would be very bullish, but signs of exhaustion could be a selling opportunity as the market remains range-bound while traders try to figure out the FOMC statement and whether or not the Federal Reserve is going to be cutting anytime soon.

There was some action liquefying the bond markets, priming the pump for the financial system, but that was not necessarily quantitative easing, at least according to official commentary. It will be interesting to see how the market reads this, but it looks like the euro may be about to top out.

GBP/USD Technical Analysis

The British pound looks really suspicious near the 1.34 level. If the market pulls back from here, a move toward the 50-day EMA or the 200-day EMA is very possible. There is also an interest rate decision coming out of London between now and the end of the year, and that will be closely watched. If rate cuts are expected, that would not necessarily be the surprise, but the guidance could be. At this point, it appears the US dollar may be starting to flex its muscles again.

EUR/GBP Technical Analysis

The euro stalling also adds some credibility to the idea of the euro dropping against the British pound, although a massive breakdown is not expected. If the pair breaks to a fresh new low, it could drift down toward the 200-day EMA. To the upside, there is significant noise around 0.88, 0.8850, and again at 0.89, which is a longer-term resistance area going back to 2022. This pair tends to be fairly choppy, and at this point in time, the approach is more about fading rallies, much like the other two charts.

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