GBP/USD declined heavily below the 1.2900 and 1.2800 support levels to enter a bearish zone. EUR/GBP surged higher and settled above the 0.8680 and 0.8700 resistance levels.
Important Takeaways for GBP/USD and EUR/GBP
- The British Pound started a strong downward move and traded below the key 1.2900 support.
- There is crucial bearish trend line forming with resistance at 1.2740 on the hourly chart of GBP/USD.
- EUR/GBP climbed higher sharply and traded above the 0.8700 and 0.8750 resistances.
- There is a significant ascending channel forming with support near 0.8740 on the hourly chart.
GBP/USD Technical Analysis
The British Pound started a significant downward move from well above the 1.3000 level against the US Dollar. The GBP/USD pair declined below a few important supports such as 1.2950 and 1.2900.
The pair even broke the 1.2800 support and settled below the 50 hourly simple moving average. The decline was such that the pair traded close to the 1.2700 level and a new monthly low was formed near 1.2711 on FXOpen.
Recently, the pair started a short term upside correction above the 1.2720 level and the 23.6% Fib retracement level of the latest drop from the 1.2795 high to 1.2711 low.
However, the 1.2740 level is acting as a strong resistance. Besides, there is also a crucial bearish trend line forming with resistance at 1.2740 on the hourly chart of GBP/USD.
A clear break above the 1.2740 and 1.2750 resistance levels could open the doors for more gains. The next immediate resistance is at 1.2762 and the 61.8% Fib retracement level of the latest drop from the 1.2795 high to 1.2711 low.
The main resistance is at 1.2780 and the 50 hourly simple moving average. If there is an upside break above 1.2780 and 1.2800, there could be more gains above 1.2850.
On the downside, a clear break below the 1.2720 and 1.2710 support levels could push GBP/USD towards the 1.2620 level in the near term.
EUR/GBP Technical Analysis
The Euro gained advantage of the British Pound weakness and climbed above the 0.8650 and 0.8680 resistance levels. The EUR/GBP pair even traded above the 0.8700 level to move into a positive zone.
The upward move was strong above 0.8700 and the pair settled above the 50 hourly simple moving average. The pair even broke the 0.8750 resistance and traded as high as 0.8778.
Recently, it started a downside correction and tested the 0.8760 level. An immediate support is near the 0.8752 level and the 23.6% fib retracement level of the recent wave from the 0.8668 low to 0.8778 high.
More importantly, there is a significant ascending channel forming with support near 0.8740 on the hourly chart. The channel support at 0.8740 is also close to the 50 hourly SMA.
Besides, the 38.2% fib retracement level of the recent wave from the 0.8668 low to 0.8778 high is near the 0.8736 level to act as support. Therefore, if the pair corrects further, it is likely to find a strong support near the 0.8740 and 0.8735 levels.
On the upside, the main hurdles are near 0.8775 and 0.8780. A clear break above the 0.8780 level is likely to push EUR/GBP above the 0.8800 and 0.8820 resistance levels in the near term.