GBP/USD And EUR/GBP: Risk of More Downsides

Aayush Jindal -

GBP/USD started a fresh decline below the 1.3020 and 1.2980 support levels. EUR/GBP is also declining and it is trading well below the 0.9120 resistance zone.

Important Takeaways for GBP/USD and EUR/GBP

  • The British Pound started a fresh decline after it struggled to stay above 1.3050.
  • There is a major bearish trend line forming with resistance near 1.2970 on the hourly chart of GBP/USD.
  • EUR/GBP is facing a significant resistance near the 0.9110 and 0.9120 levels.
  • There is a key connecting bullish trend line forming with support near 0.9050 on the hourly chart.

GBP/USD Technical Analysis

The British Pound failed to test the 1.3100 level and started a fresh decline against the US Dollar. The GBP/USD pair broke a major support zone near the 1.2980 level to move into a bearish zone.

The pair even broke the 1.2950 support level and settled below the 50 hourly simple moving average. The decline extended below the 1.2900 zone and it traded as low as 1.2870 on FXOpen.

The pair is currently correcting higher and trading above 1.2900. There was a break above the 23.6% Fib retracement level of the recent drop from the 1.3064 high to 1.2870 low. However, the pair is now facing hurdles near the 1.2940 level and the 50 hourly simple moving average.

There is also a major bearish trend line forming with resistance near 1.2970 on the hourly chart of GBP/USD. The trend line is close to the 50% Fib retracement level of the recent drop from the 1.3064 high to 1.2870 low.

A successful break above the trend line resistance is needed to start a fresh increase above the 1.3000 resistance. The next major resistance is near the 1.3020 level, above which it could revisit 1.3080.

Conversely, the pair might continue to move down below the 1.2900 support. The next key support is near the 1.2870 level, below which it could slide sharply towards the 1.2800 level in the coming sessions.

EUR/GBP Technical Analysis

The Euro faced a strong resistance near the 0.9110 and 0.9120 levels against the British Pound. The EUR/GBP pair declined recently below 0.9100 and traded within a broad range.

The recent low is formed near the 0.9048 and the pair is currently consolidating losses. It made a recovery attempt above the 0.9060 level, plus the 23.6% Fib retracement level of the recent decline from the 0.9109 high to 0.9048 low.

However, the pair failed to gain pace above the 0.9080 level. The 50% Fib retracement level of the recent decline from the 0.9109 high to 0.9048 low also acted as a hurdle.

On the downside, there is a decent support forming near the 0.9055 level. There is also a key connecting bullish trend line forming with support near 0.9050 on the hourly chart. A clear break below the trend line support and the 50 hourly simple moving average might accelerate losses below 0.9050.

The next major support is near the 0.9000 handle, where the bulls are likely to take a strong stand. On the upside, the first key resistance is near the 0.9080 level.

The next major resistance is near the 0.9110 and 0.9120 levels. A successful close above the 0.9110 and 0.9120 levels could open the doors for a steady rise towards the 0.9150 level.