GBP/USD and EUR/GBP: British Pound Could Correct Further

Aayush Jindal -

GBP/USD is currently correcting lower and trading below the 1.3100 support. EUR/GBP is rising steadily and it might climb towards the 0.8580 resistance area.

Important Takeaways for GBP/USD and EUR/GBP

  • The British Pound started a downside correction after it failed near the 1.3280-1.3285 resistance area.
  • There was a break below a major bullish trend line with support near 1.3140 on the hourly chart of GBP/USD.
  • EUR/GBP is climbing higher and it is trading above the 0.8500 resistance area.
  • There was a break above a key bearish trend line with resistance near 0.8525 on the hourly chart.

GBP/USD Technical Analysis

After a strong upward move, the British Pound faced a strong resistance near the 1.3280-1.3285 area against the US Dollar. As a result, the GBP/USD pair started a fresh decline and broke the 1.3200 support area.

There was a close below the 1.3150 pivot level and the 50 hourly simple moving average. Moreover, there was a break below a major bullish trend line with support near 1.3140 on the hourly chart of GBP/USD.

Finally, there was a break below the 1.3100 support area and the pair traded as low as 1.3053 on FXOpen. It is currently consolidating losses above the 1.3050 support area.

An initial resistance is near the 1.3100 area. Besides, the 23.6% Fib retracement level of the recent decline from the 1.3283 high to 1.3053 low is also near the 1.3100 area.

The main resistance is near the 1.3140 and 1.3150 levels. The 50 hourly simple moving average is also near the 1.3150 level and a connecting bearish trend line.

More importantly, the 50% Fib retracement level of the recent decline from the 1.3283 high to 1.3053 low is near the 1.3165 level. Therefore, a successful break above 1.3150 and 1.3165 is needed for a fresh increase above the 1.3200 resistance in the near term.

On the downside, an initial support is near the 1.3050 level, below which GBP/USD is likely to extend its decline towards the 1.3000 support area.

EUR/GBP Technical Analysis

The Euro started a steady rise from the 0.8440 swing low against the British Pound. The EUR/GBP pair broke a few important resistances near the 0.8480 and 0.8500 levels to move into a positive zone.

Moreover, there was a break above the 0.8520 resistance and the 50 hourly simple moving average. Finally, there was a break above a key bearish trend line with resistance near 0.8525 on the hourly chart.

The pair is now trading above the 76.4% Fib retracement level of the downward move from the 0.8548 high to 0.8443 low. Therefore, there are chances of more gains above the 0.8548 high.

The next resistance could be near the 0.8575-0.8580 area. Besides, the 1.236 Fib extension level of the downward move from the 0.8548 high to 0.8443 low.

Any further gains could lead the EUR/GBP pair towards the main 0.8600 resistance area in the near term. Conversely, there might be a short term downside correction towards the broken trend line and 0.8520.

The main support on the downside is near the 0.8500 area and the 50 hourly SMA. If there is a close below the 0.8500 support, the pair could start a steady decline towards the 0.8450 support.