GBP/USD failed to continue above 1.3120 and declined below the 1.3035 support. On the other hand, EUR/GBP is rising and it is likely to continue higher above the 0.8540 resistance.
Important Takeaways for GBP/USD and EUR/GBP
- The British Pound started a sharp decline after it failed to clear the 1.3120 resistance area.
- There was a break below a key ascending channel with support near 1.3055 on the hourly chart of GBP/USD.
- EUR/GBP started a decent upward move from the 0.8486 swing low.
- There was a break above a major bearish trend line with resistance near 0.8530 on the hourly chart.
GBP/USD Technical Analysis
After a steady rise, the British Pound struggled to stay above the 1.3100 area against the US Dollar. As a result, the GBP/USD pair formed a top near the 1.3118 level on FXOpen and recently started a fresh decline.
There was a break below the 1.3100 and 1.3080 support levels. Moreover, there was a break below a key ascending channel with support near 1.3055 on the hourly chart of GBP/USD.
The pair settled below the 1.3050 level the 50 hourly simple moving average. More importantly, there was a break below the 50% Fib retracement level of the upward move from the 1.2954 low to 1.3118 high.
It seems like GBP/USD bears are in control and they are likely to push the price below the 1.3000 support. An immediate support is near the 1.2990 area. It represents the 76.4% Fib retracement level of the upward move from the 1.2954 low to 1.3118 high.
If there is a downside break below the 1.2990 level, there are chances of more losses towards the 1.2950 support area.
Conversely, GBP/USD is likely to face a lot of hurdles on the upside near the 1.3020 level if it corrects higher. The main resistance is near the 1.3050 level and the 50 hourly simple moving average.
Therefore, a close above 1.3050 and the 50 hourly simple moving average is needed for a decent recovery in the near term. The next key resistance is near the 1.3100 and 1.3120 levels.
EUR/GBP Technical Analysis
The Euro declined heavily after it found resistance near the 0.8600 area against the British Pound. The EUR/GBP pair broke a few important support near 0.8550 level before it found support near the 0.8500 area.
A low was formed near 0.8486 before the pair started an upside correction. It broke the 0.8515 resistance level, plus the 23.6% Fib retracement level of the downward move from the 0.8595 high to 0.8486 low.
Moreover, there was a break above a major bearish trend line with resistance near 0.8530 on the hourly chart. The pair is now trading above the 0.8530 level and the 50 hourly simple moving average.
An initial resistance is near the 0.8540 level since it coincides with the 50% Fib retracement level of the downward move from the 0.8595 high to 0.8486 low.
Any further gains could lead the EUR/GBP pair towards the main 0.8580 resistance area in the near term. If the pair fails to continue above the 0.8540 resistance area, there could be a downside correction.
On the downside, the key supports are near 0.8530 and 0.8515, below which EUR/GBP may perhaps retest the 0.8485 support.
* FXOpen International, best ECN broker of 2021, according to the IAFT