EUR/USD, GBP/USD and EUR/GBP Forecasts – Currencies Test Major Levels of Market Memory

EUR/USD Technical Analysis

The Euro initially did rise a bit against the United States dollar, but the market continues to see a lot of resistance, especially near the 1.18 level. All things being equal, this is a market that has been range-bound for a while, so I am watching this area very closely because I think you have a situation where if we could break 1.1850, then the Euro goes looking to the 1.20 level.

Signs of exhaustion for me, at least, are short-term selling opportunities as the ECB is flat with its monetary policy, and at the same time, you have the Federal Reserve, which has been stubborn about cutting rates, although they are expected to cut 50 basis points this year. So, I think this remains fairly neutral.

GBP/USD Technical Analysis

The British pound is peaking above the 1.35 level, and at this point, it will be interesting to see where we finish rallying. If we turn around and break down below the 1.35 level, I think at that general move, we probably look at a continuation of the consolidation.

If we break 1.36, then the British pound could go much higher. There is some weakness in the US dollar overall, so this isn’t exactly an impossible move to the upside by any stretch. And if there is one currency that I think can do it, it’s probably the British pound.

EUR/GBP Technical Analysis

The Euro fell against the British pound during the trading session on Friday, rather aggressively, and found itself testing this 0.8650 level. The 200-day EMA for me is still the story here. If we can break down below there, then the 0.86 level gets targeted, followed by the 0.8525 level. And I do think it happens eventually.

We’ll just have to wait and see, and I do favor shorting this pair. And rallies at this point in time, for me at least, are going to be selling opportunities. You’ll notice that the 0.8750 level, an area that I had mentioned previously as being potentially important, acts as a roof to the market and ceiling, so with that, it looks like the sellers are back. I think it’s probably only a matter of time.

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