EUR/USD, GBP/USD and EUR/GBP Forecasts – US Dollar Fighting Back on Tuesday

EUR/USD Technical Analysis

The Euro initially looked a bit positive early in the trading session on Tuesday. But as you can see, we have seen a pretty significant pullback from the highs. But you have to keep in perspective the time of year that it is. It’s not a time of year when you see massive moves.

1.18 Level Barrier

So I think the fact that we rallied and then gave up those gains suggests to me that we will continue to see the 1.18 level offer a bit of a barrier in the short term. And that makes sense. Most people are focused on holidays, not necessarily anything market-related, unless there is some type of massive external shock.

GBP/USD Technical Analysis

The British pound looks very much the same, as we continue to see the 1.35 level offer a bit of a barrier. This is an area that I think is more of a zone than a level. But if we break down below the lows of the Monday session, then we could drop towards the 1.3375 level. We’ll just have to wait and see whether or not that happens.

Major Inflection Point

If we break to the upside, maybe above 1.3550, it opens up a move to 1.37. I think at this point we’re at a major specific inflection point, if you will. So, we’ll have to see how this plays out, but definitely an area I’ll be watching. I expect the move to be next week.

EUR/GBP Technical Analysis

The Euro continues to soften up a bit against the British pound. I do think this makes sense when you look at both of these currencies against the US dollar. The pound should continue to strengthen overall. I believe that short-term rallies will get sold into. The 50-day EMA is sitting here at the 0.8750 level, and I do think you’ve got a scenario here where eventually we break down toward the 200-day EMA. However, if we can break above 0.8750, then we could challenge 0.88. Nonetheless, it makes sense that we go lower over the next several weeks.

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