EUR/USD, GBP/USD and EUR/GBP Forecast – US Dollar Struggling on Monday

EUR/USD Technical Analysis

The euro has rallied a little bit during early trading here on Monday as the market looks as if it is going to try to get to the 50-day EMA, possibly, or perhaps even lower than that. All things being equal, though, this is a market that I believe will eventually see sellers come back in and push to the downside. After all, we’ve seen quite a bit of selling pressure and somewhat constant selling pressure since the September FOMC meeting.

You could make an argument for a little bit of an attempt at a double bottom here, but really, at this point, this is the first time we’ve seen the possibility of a higher low. We’ll just have to wait and see. The 50-day EMA and the downtrend line both could come into the picture to offer resistance. I’ll be looking for signs of exhaustion to start shorting.

GBP/USD Technical Analysis

The British pound has rallied slightly during the trading session, but the pound is probably one of my least favorite currencies to own. Right now, we are in the middle of a consolidation area between the 1.30 level on the bottom and the 1.32 level above, offering a resistance barrier. In fact, 1.32 was previously supported. So, it should now be resistance, and we’ve already seen it act as resistance one time. It’s also worth noting that the 50-day EMA looks as if it’s getting ready to cross below the 200-day EMA, kicking off the so-called death cross. So, I still think this is a “fade the rally” type of scenario.

EUR/GBP Technical Analysis

The Euro initially tried to rally during the trading session against the British pound, but it has given back some of the gains. I think this is a situation where traders are trying to figure out whether or not the market will continue to find buyers on the dips and grind its way towards the 0.89 level. The 0.89 level is the measured move of the previous consolidation. The 0.8750 level is an area that previously had been resistant and now should be support, especially as the 50-day EMA is rising towards it. So overall, I’m bullish. I just recognize it will be choppy and more of a grind to the upside than anything else.

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