EUR/USD, GBP/USD and EUR/GBP Forecast – US Dollar Continues to See Strength

EUR/USD Technical Analysis

The euro has dropped a bit during the early hours on Thursday, as we continue to see the US dollar strengthen overall. With that being said, it still looks likely that we will challenge the 1.15 level and eventually drop down to the 1.14 level, with the 200-day EMA coming into the picture as a target and possible support level. Anything below there opens up a move down to the 1.11 level, as mentioned yesterday. Rallies at this point continue to get sold into, as there is not much momentum behind the euro. There are also concerns that the Federal Reserve may not be able to cut rates because they do not get job numbers in time, although that is probably just the latest excuse.

GBP/USD Technical Analysis

The British pound has gone back and forth in fairly quiet trading, but keep in mind that during the previous session it plunged lower. We will see if the 1.30 level offers support; if we break down below there, it is possible that we could drop toward the 1.2750 level. Short-term rallies likely get sold into, and this is not a market with any interest to the long side, at least not until we clear the 1.32 level—something not expected easily.

EUR/GBP Technical Analysis

The euro has dropped a bit against the British pound, and we continue to see the same sideways action. This is not a huge surprise, as this pair is typically very choppy. We have recently broken above a significant resistance barrier, so the market will normally bounce around for a bit. The 50-day EMA sits at the 0.8750 level, which happens to be the previous resistance level. Market memory likely plays a big role here, and we will probably see this market bouncing around as it tries to determine where to go next. Buying dips remains an attractive setup.

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