EUR/USD, GBP/USD and EUR/GBP Forecast – Euro Mixed in Early Trading

EUR/USD Technical Analysis

The Euro has initially tried to rally during the trading session here on Monday, but it looks like the 50-day EMA is going to continue to be a bit much to get over. If we can break above there, then we’re looking at possibly taking on the 1.17 level and then the 1.18 level. All things being equal, though, this is a market that I’ve been talking about for a while, which to me looks like a market that did a classic trend line break and then tried to get back above it and can’t.

I think, despite what we’ve been told, the US dollar isn’t dying. And in fact, that was the FOMC candle at the very top. And we’ve fallen since then. And it doesn’t look like we’ve had any really serious push to the upside. So, I still think the euro continues to be a bit soft.

GBP/USD Technical Analysis

The British pound initially tried to rally during the trading session against the US dollar but then fell to reach the 1.34 level. If we break down below the 1.34 level, then the 200-day EMA could be targeted at the 1.3272 level. Short-term rallies, I think, ultimately are situations where you look to fade signs of exhaustion. The 1.35 level, of course, is an area that has been resistant recently. And if we can break above there, then the 1.36 level could be targeted. All things being equal, this is more or less a neutral and sideways market as far as I can see.

EUR/GBP Technical Analysis

And new for today, we’re going to start looking at the euro against the British pound. The euro has gone back and forth against the British pound as we are in a very tight and kind of neutral range of about 150 pips. We have 0.86 offering support and 0.8750 above offering resistance. We are sitting right here on the 50-day EMA.

So, I think this remains a market that trades roughly in about a 50 pip range between 0.8666 and 0.8730, give or take a few pips on each turn. So ultimately, if we get to the bottom of that range, I’m interested in short-term longs. If we get to the top of that range, I’m interested in short-term shorts. That being said, if we break out of the 150 pip range, then obviously a much bigger move would be at foot.

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