EUR/USD, GBP/USD and EUR/GBP Forecast – US Dollar Continues to Grind Slowly

EUR/USD Technical Analysis

The euro is slightly negative against the U.S. dollar in early Friday trading as we continue to drift sideways overall. Short-term rallies, I think, open up possibilities of fading those rallies. The 1.1550 level, giving way to a lower move, opens up the possibility of the 1.14 level. If we do rally, I think the 1.17 level continues to be resistant, as it has been over the last couple of weeks. Keep in mind that the FOMC meeting was the top, and that tells you something.

GBP/USD Technical Analysis

The British pound has drifted a little bit lower during trading here on Friday as well, but we are supported by the 200-day EMA and the 1.33 level. Breaking down below that area opens up the possibility of a move to the 1.32 level, but to me, it looks like we’re not quite ready to do that. Short-term rallies will have to contend with the 1.34 level, where I would anticipate a bit of resistance, not only due to the fact that it has been important multiple times, but also because we have the 50-day EMA sitting just about 29 pips above there and drifting lower. As we are between the 50-day EMA and the 200-day EMA, expect a bit of choppiness.

EUR/GBP Technical Analysis

The euro has gone back and forth during the trading session on Friday against the British pound, showing perhaps there is a little bit of exhaustion in this area. It does make a certain amount of sense, considering that just 30 pips above, we have pretty significant resistance. We also have a bit of divergence if you look at the MACD, but really, at this point in time, I think the thing to keep in mind is that we have been range-bound for a while. As we are at the top of this little 40-pip range, I think it makes sense that maybe we drift back toward the downside.

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