EUR/USD, GBP/USD and EUR/GBP Forecast – US Dollar a Little Soft on Monday

EUR/USD Technical Analysis

The euro initially did rally a bit during the trading session here on Monday, only to give back some of the gains. That being said, the 50-day EMA sitting above probably causes a little bit of hesitation. Even if we were to break above the 50-day EMA, it’s likely that the 1.17 level continues to cause a bit of a headache. So I am looking for signs of exhaustion to start shorting.

GBP/USD Technical Analysis

The British pound is rallying a bit in the early hours here on Monday, but the 1.32 level looms large as a potential resistance barrier, right along with the 200-day EMA, which sits just above there. Signs of exhaustion will get sold into, and I am looking forward to doing so. The British pound has had a little bit of a revival as of late, as the Bank of England chose not to cut rates on Wednesday of last week, but it is still pretty close in the vote count, and it’s probably only a matter of time before they do, in fact, have to cut.

EUR/GBP Technical Analysis

The euro initially tried to climb against the British pound after gapping lower, but you can see there’s a lot of overhead resistance. I still think the euro is looking to the 0.8750 level as a potential support level and therefore a buying area. We’ll just have to wait and see how it behaves. Keep in mind that this pair does tend to move fairly slowly, so you have to be cautious. You don’t want to jump in all the way up here just to find out you could have gotten it 25 pips lower. So, what you’re looking for is a bit of a drop and then a bounce. That way you can see that at least the market is fighting back. Overall, we’re still very much in an uptrend.

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