EUR/USD, GBP/USD and EUR/GBP Forecast – US Dollar Slightly Weaker on Tuesday

EUR/USD Technical Analysis

The euro has risen just a bit in the early hours here on Tuesday as we continue to see a lot of noise, but this is a scenario where traders are hanging around the 50-day EMA here and trying to figure out whether or not we are going to continue to go to the upside. Ultimately, I think the 1.17 level will be very difficult to break above, and if we did, then you still have to deal with the previous uptrend line in the 1.18 level. Keep in mind that the market is going to have to deal with not only the Federal Reserve interest rate decision, but also the European Central Bank. So, I think what we’re doing is just bouncing around in a short-term range before we get the Americans on Wednesday and the Europeans on Thursday.

GBP/USD Technical Analysis

The British pound has been all over the place, and at this juncture, I think we’ve got a situation that we are just simply bouncing around between the 200-day EMA underneath and the 50-day EMA above. With this being said, the market is likely to continue to see a lot of questions asked about the overall direction. Ultimately, it’s worth noting that the British pound has been falling since the FOMC meeting. And with that, I think it tells you most of what you need to know. Rallies at this point in time, I believe, continue to get sold into.

EUR/GBP Technical Analysis

The euro has pierced a major resistance barrier in the form of 0.8750 against the British pound. At this point, it does look like it’s going to go higher. And it’s worth noting that the British pound has underperformed, all things being equal, against most currencies, and this may not be any different. If we can break to the upside, then the measured move is for a 150 pip extension from here. That brings you to the 0.89 level. That happens to be an area where we’ve seen previous resistance, so it does make a juicy target. Short-term pullbacks at this point in time have shifted from potential selling opportunities, I believe, into potential buying on the dip. We’ll have to see how this goes, but it certainly looks like we’re going to try at least to extend to the upside.

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