EUR/USD, GBP/USD and EUR/GBP Forecasts – The US Dollar Testing Major Areas

EUR/USD Technical Analysis

The Euro has risen slightly in early trading on Tuesday, but we still need to overcome the 1.18 level. And I think this is an area where we’ll see whether or not the markets have actually changed. After all, this is an area we’ve been in multiple times. So, whether or not we will break out here makes a huge difference as to where we go longer term. Short-term pullbacks make sense, and signs of exhaustion, I think, are very possible here.

GBP/USD Technical Analysis

The British pound, of course, is trying to break to the upside as we are right on the precipice of the 1.3450 level that I had mentioned previously. Being an area that I think we get above there, then we really take off, perhaps to the 1.37 level. Short-term pullbacks, I think, open up the possibility of a retest, possibly even as deep as the 50-day EMA. We’ll have to see how the British pound is going to behave because, quite frankly, I think the market’s a little ahead of itself with the Federal Reserve.

And of course, the Bank of England is likely to be loose with its monetary policy as well, so we’ll just have to wait and see.

EUR/GBP Technical Analysis

The euro initially tried to rally against the British pound but then fell pretty significantly to show signs of exhaustion. The 0.8750 level continues to be support. And it looks to me like we are just simply hanging around trying to sort out where to go next. After all, this is the market that I think hanging around the 50-day EMA as well just shows that we’re still very much in an uptrend. But recently we’ve had a little bit of pullback. Now we have to determine whether this pullback is something bigger or not. A breakdown below the 0.87 level, at least for me, confirms that we’re going lower. In the meantime, it looks like consolidation.

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