EUR/USD, GBP/USD and EUR/GBP Forecasts – US Dollar Stable in Thin Trading

EUR/USD Technical Analysis

The Euro looks like it is stalling a bit here at the 1.18 level, which is the top of a large range that we have been in for some time. With that being said, I think you have a situation where, as we head into the holidays, nobody really wants to put a lot of money into the market, and that makes quite a bit of sense.

I am somewhat hesitant to do anything here other than look for signs of exhaustion that I could short, and that is probably something that I need to say has to play out over the next 2 to 3 trading sessions next week. It is probably okay to trade for a couple of days, but then we have the situation of New Year’s. I think we are hitting a ceiling. A pullback still makes sense to me, but if we break 1.1875, then we are going much higher.

GBP/USD Technical Analysis

The British pound is pretty similar in the sense that we are testing the 1.35 level. With that being said, I think you are looking at an area that could be a little bit of resistance. With this market struggling here, then I think you have to ask questions of it because we are heading into the holiday, or is it because it is a large round number?

It could be a little of both here and in this environment. I would not be surprised at all to see the market pull back towards the 1.34 level. However, if we continue higher, 1.37 is very realistic.

EUR/GBP Technical Analysis

The Euro is very stagnant against the British pound, but again, that is not surprising considering the day of the year it is. Furthermore, you have to keep in mind that this is a pretty choppy pair anyway. We are pressing the downside, so it will be interesting to see if we can break down.

If we break down below 0.87, the British pound probably starts to take over this pair, and we could find ourselves down at the 0.86 level. It is worth saying that the pound looks stronger than the Euro against the dollar, and that is generally your measuring stick.

For a look at all of today’s economic events, check out our economic calendar.