GBP/USD and EUR/GBP: Upsides Could Be Capped in British Pound

Aayush Jindal -

GBP/USD opened with a gap up above the 1.3250 level. EUR/GBP declined below the 0.9145 support, but it could find a strong support near 0.9080.

Important Takeaways for GBP/USD and EUR/GBP

  • The British Pound opened with a gap higher and trading above the 1.3300 level.
  • There is a connecting bearish trend line forming with resistance near 1.3395 on the hourly chart of GBP/USD.
  • EUR/GBP opened with a gap lower and traded below the key 0.9145 support zone.
  • There was a break below a major bullish trend line with support near 0.9135 on the hourly chart.

GBP/USD Technical Analysis

The British Pound started a fresh decline from the 1.3480 resistance zone against the US Dollar. The GBP/USD pair broke the 1.3280 support level and even spiked below the 1.3150 support.

The pair traded as low as 1.3134 on FXOpen before starting an upside correction. There was a clear break above the 1.3180 and 1.3200 resistance levels. More importantly, the pair opened with a gap higher and trading above the 1.3300 level.

There was a break above the 50% Fib retracement level of the downward move from the 1.3477 high to 1.3134 low. It is now trading well above the 1.3300 level and the 50 hourly simple moving average.

On the upside, an initial resistance is near the 1.3345 level. It is close to the 61.8% Fib retracement level of the downward move from the 1.3477 high to 1.3134 low. There is also a connecting bearish trend line forming with resistance near 1.3395 on the hourly chart of GBP/USD.

As long as the pair is below the trend line resistance, there is a risk of a fresh decline. In the stated case, the pair could attempt to fill the open gap and test the 1.3250 support zone in the near term.

Conversely, the pair could continue to move higher above the 1.3345 and 1.3400 resistance levels. The next major resistance for the bulls could ne 1.3480 in the near term.

EUR/GBP Technical Analysis

The Euro remained in a positive zone and climbed above the 0.9150 level this past week against the British Pound. The EUR/GBP pair even surpassed the 0.9200 resistance level.

It traded as high as 0.9229 before starting a downside correction. It broke the 0.9200 and 0.9180 support levels. More importantly, the pair opened with a gap lower and traded below the key 0.9145 support zone, plus the 50 hourly simple moving average.

There was a break below the 50% Fib retracement level of the upward move from the 0.8984 swing low to 0.9229 high. There was also a break below a major bullish trend line with support near 0.9135 on the hourly chart.

The pair tested the main 0.9080 support zone, and the 61.8% Fib retracement level of the upward move from the 0.8984 swing low to 0.9229 high.

It is currently correcting higher, but the 0.9120 level and the 50 hourly simple moving average are acting as hurdles for the bulls. If it clears the 0.9120 zone, the bulls could attempt close to the gap in the coming sessions.

Conversely, the pair could continue to move down. The first major support on the downside is at 0.9080, below which EUR/GBP might revisit the 0.9000 zone.