EUR/USD, GBP/USD and EUR/GBP Forecasts – FX Markets Quiet on Boxing Day

EUR/USD Technical Analysis

The US dollar is somewhat quiet in thin trading. The Euro, of course, has been somewhat choppy during the early hours here on Friday as most traders are probably sitting on the sidelines with several European countries celebrating Boxing Day or some variation of that, and the reality is most Americans won’t be at work either. So, with all of that being said, I only read so much into the candlestick, but it does suggest, based on Wednesday trading, that the 1.18 level will continue to be a bit of a headache. A move above 1.1850 changes the narrative, and we go looking to the 1.20 level.

GBP/USD Technical Analysis

The British pound is very much the same, and this leads me to believe that the 1.35 level, where it’s struggling, might be important. But what else leads me to believe is that the overall attitude of the market is being influenced by the US dollar and not the Pound or the Euro, so far as this is all about the US dollar softening over the last several weeks. The question, of course, is whether this will be a major trend change. I don’t know if that’s the case, at least not quite yet.

You could take a look at the longer charts and just simply say, “okay well, we’re still consolidating.” I think the next week is going to be difficult to read too much due to a lack of volume, so that continues to be an issue as well. I think a lot of answers will be made apparent early in next year’s trading.

EUR/GBP Technical Analysis

The Euro gapped a little bit lower against the British pound and then tried to recover, but it is starting to see a little bit of trouble near the 0.8750 level again, which, of course, is an area that’s been important multiple times. We also have the 50-day EMA hanging around, and it suggests that perhaps this is going to remain a barrier. I like the idea of fading short-term rallies, as it does seem like we are going to roll over before it’s all said and done, but it could also be a scenario where we go sideways for quite a while as well. We did recently try to get above the 0.8850 level, but have found that to be overly resistive, and it’s worth noting that the 0.89 level’s been important as massive resistance for quite some time. I think there’s probably more downside than upside at this point.

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