Market Analysis: GBP/USD Consolidates While EUR/GBP Takes Hit

GBP/USD is attempting a recovery wave above the 1.2700 resistance. EUR/GBP declined heavily below the 0.8600 and 0.8565 support levels.

Important Takeaways for GBP/USD and EUR/GBP Analysis Today

· The British Pound is attempting a fresh increase above 1.2700.

· There is a key contracting triangle forming with resistance near 1.2740 on the hourly chart of GBP/USD at FXOpen.

· EUR/GBP is trading in a bearish zone below the 0.8565 pivot level.

· There is a major bearish trend line forming with resistance near 0.8545 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair settled below the 1.2800 zone. As mentioned in the previous analysis, the British Pound turned red and extended losses below the 1.2700 pivot level against the US Dollar.

Finally, the pair tested the 1.2620 zone and recently started a recovery wave. There was a decent increase above the 1.2700 pivot level. The pair is now consolidating near the 50-hour simple moving average at 1.2740.

There is also a key contracting triangle forming with resistance near 1.2740. The triangle resistance coincides with the 50% Fib retracement level of the downward move from the 1.2787 swing high to the 1.2689 low.

On the upside, the GBP/USD chart indicates that the pair is facing resistance near 1.2740. The next major resistance is near the 76.4% Fib retracement level of the downward move from the 1.2787 swing high to the 1.2689 low at 1.2765.

A close above the 1.2765 resistance zone could open the doors for a move toward 1.2800. Any more gains might send GBP/USD toward 1.2880.

On the downside, there is a key support forming near 1.2700. If there is a downside break below 1.2700, the pair could accelerate lower. The next major support is near the 1.2665 zone, below which the pair could test 1.2620. Any more losses could lead the pair toward the 1.2550 support.

EUR/GBP Technical Analysis

On the hourly chart of EUR/GBP at FXOpen, the pair started a major decline from well above 0.8630. The Euro traded below the 0.8600 and 0.8565 support levels against the British Pound.

The EUR/GBP chart suggests that the pair even declined below the 0.8545 level and tested 0.8525. It is now consolidating losses and correcting higher above the 50-hour simple moving average and 0.8625.

The pair is now facing resistance near a major bearish trend line at 0.8545. It is close to the 23.6% Fib retracement level of the main drop from the 0.8609 swing high to the 0.8523 low. The next major resistance could be 0.8565.

The 50% Fib retracement level of the main drop from the 0.8609 swing high to the 0.8523 low is also at 0.8565. A close above the 0.8565 level might accelerate gains. In the stated case, the bulls may perhaps aim for a test of 0.8600. Any more gains might send the pair toward the 0.8630 level.

Immediate support sits near 0.8525. The next major support is near 0.8500. A downside break below the 0.8500 support might call for more downsides. In the stated case, the pair could drop toward the 0.8440 support level.