GBP/USD Extends Rally, EUR/GBP Eyes Steady Recovery

Aayush Jindal -

GBP/USD remained strong above 1.4000 and it recently climbed above 1.4200. EUR/GBP is correcting higher and it is aiming a break above 0.8640.

Important Takeaways for GBP/USD and EUR/GBP

  • The British Pound formed a strong support base above 1.4050 and climbed above 1.4150.
  • There is a key bullish trend line forming with support near 1.4155 on the hourly chart of GBP/USD.
  • EUR/GBP started a fresh increase and it is trading above the 0.8600 zone.
  • There is a major rising channel forming with resistance near 0.8640 on the hourly chart.

GBP/USD Technical Analysis

After finding a strong buying interest near 1.4000, the British Pound started a fresh increase against the US Dollar. The GBP/USD pair gained pace and it broke the 1.4100 resistance zone.

The upward move gained pace above the 1.4150 level and the 50 hourly simple moving average. It even broke the 1.4200 zone and traded as high as 1.4220 on FXOpen. It is now correcting gains and trading below the 1.4200 level.

It broke the 23.6% Fib retracement level of the upward move from the 1.4077 swing low to 1.4220 high. On the downside, the first key support is near the 1.4165 level.

The main support is now forming near the 1.4150 level. There is also a key bullish trend line forming with support near 1.4155 on the hourly chart of GBP/USD. The trend line is close to the 50% Fib retracement level of the upward move from the 1.4077 swing low to 1.4220 high.

The 50 hourly simple moving average is also near the 1.4155 zone. If there is a downside break below the trend line, the pair could decline towards the 1.4100 support.

On the upside, an immediate resistance is near the 1.4200 level. The next major resistance is near the 1.4220 level. A successful close above 1.4000 and a follow up move above 1.4220 could open the doors for a move towards the 1.4280 resistance.

EUR/GBP Technical Analysis

The Euro declined heavily from well above the 0.8650 level against the British Pound. The EUR/GBP pair even broke the 0.8600 support before the bulls took a stand near the 0.8560 level.

The pair started an upside correction from the 0.8560 zone. It climbed above the key 0.8600 resistance level and the 50 hourly simple moving average. There was a break above the 23.6% Fib retracement level of the downward move from the 0.8700 high to 0.8560 low.

However, it struggled to clear the 0.8635 level and corrected lower. The pair is currently stable above 0.8600 and the 50 hourly simple moving average.

There is also a major rising channel forming with resistance near 0.8640 on the hourly chart. The main resistance is forming near the 0.8635 and 0.8640 zone. It is near the 50% Fib retracement level of the downward move from the 0.8700 high to 0.8560 low.

If there is an upside break above 0.8640, the pair could start a fresh rally. In the stated case, there are chances of a move towards the 0.8700 level.

Conversely, the pair could start a fresh decline below the 0.8600 support zone. The key support is still near the 0.8560 level. Any more losses could set the pace for a drop towards the 0.8520 support.

This forecast represents FXOpen Markets Limited opinion only, it should not be construed as an offer, invitation or recommendation in respect to FXOpen Markets Limited products and services or as financial advice.