EUR/USD, GBP/USD and EUR/GBP Forecasts – Dollar Soft in Early Friday Trading

EUR/USD Technical Analysis

The euro has risen so slightly against the US dollar, but it does not look like it is exactly ready to take off to the upside. We are in an area that I think could cause a little bit of resistance. At this point in time, I am actually looking for the euro to roll over. Whether or not it does, we cannot guarantee anything, but we have been in a gentle downtrend for a while now, really, since the September FOMC meeting. Therefore, I do think there is something to this. If we break below the 1.16 level, it opens up a move to the 1.150 level, followed by 1.14. If we break above 1.17, then it looks like we will just stay in the longer-term consolidation range.

GBP/USD Technical Analysis

The British pound started falling immediately out of the open as 1.32 offered pretty significant resistance. We have bounced a little bit from there, but when you look at the British pound, it looks pretty ugly. The 1.32 level was the previous support level for what looks like a topping pattern now, so it makes a certain amount of sense that it offered resistance. The 50-day EMA is starting to curl to the downside and getting fairly close to crossing the 200-day EMA, opening up the possibility of the so-called death cross.

EUR/GBP Technical Analysis

The euro rallied significantly against the British pound, but it has given back about half of its gains. At this point, it looks like it is going to be very choppy, but it does look very bullish. I think short-term pullbacks are buying opportunities, as they have been for several weeks now. The 0.8750 level is support, as it was the top of the previous consolidation area.

On the break below there, you could re-enter that consolidation area again, but it is worth noting that the measured move from the breakout for consolidation to be extended for targeting was 0.89, and I do think we are getting there, given enough time. Keep in mind, this is a somewhat slow-moving pair.

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