EUR/USD, GBP/USD and EUR/GBP Forecast – US Dollar Slightly Higher

EUR/USD Technical Analysis

The euro drifted slightly during the trading session on Monday as we continue to see upward pressure on the US dollar. With that being said, the market is likely to test the 1.15 level and then possibly break down below there to reach the 1.14 level, where the 200-day EMA currently sits. We’ll be watching whether or not that area holds. If 1.14 gets broken to the downside, it’s likely that we go down to 1.11. Short-term rallies that bounce and show signs of exhaustion, I believe, continue to be selling opportunities.

GBP/USD Technical Analysis

The British pound gapped lower but did turn around to show signs of life. All things being equal, I think the 1.32 level offers resistance, right along with the 200-day EMA at the 1.3271 level. If we break down below the bottom of the hammer from Friday, the 1.31 level being broken in that event could open up a plunge down to 1.27. I think eventually that happens, but it takes a little bit of time to get there. We may have a short-term bonus and then a sell-off as we continue to get lower.

EUR/GBP Technical Analysis

The euro initially gapped higher against the British pound but dropped a bit to continue to show hesitation. The 0.8750 level should be an area of interest, as it was previous resistance, and now market memory could open up the possibility of finding support there. I’ll be watching that closely. If we get a bit of a bounce, I’d like to be involved in this market on the right-hand side of the V pattern that would form on some type of rebound.

Ultimately, if we break down below the 50-day EMA, it eliminates everything. But right now, we are far too early for that to be a major concern. I’m still bullish, but I need to see some type of pullback and a reaction from bullish traders to turn things around and then get involved.

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