EUR/USD, GBP/USD and EUR/GBP Forecasts – US Dollar Shrinks with Yields

EUR/USD Technical Analysis

The euro rallied slightly during the trading session here on Wednesday as we continue to bounce around the 50-day EMA. More importantly, we are bouncing around a consolidation area which I think extends from the 1.14 level on the bottom and the 1.1810 area on the top, possibly extending to the 1.1850 level.

As we are in the middle of this area, I would not read too much into the short-term price action, but once we get an impulsive candlestick in one direction or the other, we probably go looking to the outer edges of consolidation.

GBP/USD Technical Analysis

The US dollar has been a little softer against the British pound as well, and it looks like we are going to try to get to the 1.35 level yet again. And again, I am going to look at that area or just above it as a potential shorting opportunity until the range-bound behavior in this pair starts to break down.

As things stand right now, we are still very much in that range, and we have support below near the 50-day EMA that I think comes into the picture as well. I look at this as a potential sideways range-bound trade and just treat it the same as I have over the last couple of weeks.

EUR/GBP Technical Analysis

The euro continues to bounce around the 200-day EMA against the British pound, and I do think we are trying to break down here because, quite frankly, the British pound has acted a bit better than the euro overall, and I think that will continue to be the case.

If that is the overall attitude of the market, it is probably only a matter of time before we go looking to the 0.86 level. Any rally at this point in time to me looks like a potential shorting opportunity unless we were to break above the 0.8750 level, something that looks a little unlikely at this point in time.

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