GBP/USD failed to stay above the 1.2800 support and declined heavily. EUR/GBP is rising steadily and it remains well supported on the downside above 0.8900.
Important Takeaways for GBP/USD and EUR/GBP
- The British Pound is trading well below the 1.2800 and 1.2740 resistance levels.
- There is a major bearish trend line forming with resistance near 1.2590 on the hourly chart of GBP/USD.
- EUR/GBP is showing a lot of positive signs above the 0.8900 support area.
- There is a key bullish trend line forming with support near 0.8940 on the hourly chart.
GBP/USD Technical Analysis
This past week, the British Pound started a major decline from well above the 1.2750 pivot area against the US Dollar. As a result, the GBP/USD pair broke many key supports near the 1.2720 and 1.2650 levels.
The decline was such that the pair even broke the 1.2500 support area and settled well below the 50 hourly simple moving average. Finally, the pair declined below the 1.2400 area and traded as low as 1.2238 on FXOpen.
It is currently correcting higher and trading above the 1.2320 level. It broke the 23.6% Fib retracement level of the recent drop from the 1.2624 high to 1.2238 low.
The first important resistance on the upside is near the 1.2400 and 1.2420 levels. The 50% Fib retracement level of the recent drop from the 1.2624 high to 1.2238 low is also near the 1.2430 level.
Moreover, there is a major bearish trend line forming with resistance near 1.2590 on the hourly chart of GBP/USD. Therefore, the pair is likely to face a lot of hurdles on the upside, starting with 1.2400 and up to 1.2550.
On the downside, an initial support is near the 1.2300 level. If the pair fails to correct higher above 1.2400, there is a risk of more losses below the 1.2300 support area. The next key support is near the 1.2250 level, below which it could visit the 1.2200 zone.
EUR/GBP Technical Analysis
The Euro started a decent rise from the 0.8650 support area against the British Pound. The EUR/GBP pair gained pace and broke a couple of key hurdles near the 0.8750 and 0.8800 levels.
Besides, there was a clear close above the 0.8900 level and the 50 hourly simple moving average. The pair traded as high as 0.9060 and it is currently consolidating losses.
There was a test of the 23.6% Fib retracement level of the upward move from the 0.8842 low to 0.9060 high. The first key support on the downside is visible near the 0.8950 level.
It coincides with the 50% Fib retracement level of the upward move from the 0.8842 low to 0.9060 high. There is also a key bullish trend line forming with support near 0.8940 on the hourly chart.
Therefore, dips remain well supported on the downside towards the 0.8900 area. Any further losses may perhaps lead the EUR/GBP pair towards the 0.8840 support area in the near term.
The overall price action is positive for EUR/GBP and if GBP/USD continues to face hurdles, there are chances of more gains in EUR/GBP above the 0.9050 level in the coming days. The next major hurdle is near the 0.9120 level.