GBP/USD is Facing Tough Challenge, EUR/GBP Signaling More Gains

Aayush Jindal -

GBP/USD failed on more than one occasion near 1.3400 and declined below 1.3350. EUR/GBP gained bullish momentum towards 0.9000 and settled nicely above 0.8950.

Important Takeaways for GBP/USD and EUR/GBP

  • The British Pound is facing a strong resistance near the 1.3400 zone.
  • There was a break below a key bullish trend line with support near 1.3345 on the hourly chart of GBP/USD.
  • EUR/GBP started a steady rise above the 0.8900 and 0.8950 resistance levels.
  • There was a break above a major contracting triangle with resistance near 0.0.8925 on the hourly chart.

GBP/USD Technical Analysis

The British Pound started a fresh increase after forming a support base near 1.3200 against the US Dollar. The GBP/USD pair cleared a few key hurdles near 1.3320 and 1.3350 to move into a positive zone.

However, the pair struggled to clear the 1.3400 resistance. There were two attempts to clear 1.3400, but the bulls failed to gain strength. The last swing high was formed near 1.3381 on FXOpen before the pair reacted to the downside.

There was a break below the 1.3350 support level and the 50 hourly simple moving average. Moreover, there was a break below a key bullish trend line with support near 1.3345 on the hourly chart of GBP/USD.

The pair even spiked below 1.3300 and traded as low as 1.3288. It is currently rising and trading above the 1.3320. There was a break above the 50% Fib retracement level of the recent decline from the 1.3381 high to 1.3288 low.

However, the pair is facing a strong resistance near the 1.3345 level and the 50 hourly simple moving average. There is also a connecting bearish trend line forming with resistance near 1.3358 on the same chart.

A clear break above the 1.3345 and 1.3360 levels could lead the pair towards the main 1.3400 resistance. A close above 1.3400 is needed for a larger increase.

Conversely, the pair could resume its decline below 1.3320. The first major support is near 1.3285, below which the pair might revisit the 1.3200 support zone.

EUR/GBP Technical Analysis

The Euro started a strong increase from the 0.8880 support level against the British Pound. The EUR/GBP pair surpassed the 0.8920 resistance level to move into a positive zone.

The upward move gained pace above the 0.8950 resistance and the 50 hourly simple moving average. There was also a break above a major contracting triangle with resistance near 0.0.8925 on the hourly chart.

The pair even cleared the 0.8980 level and traded as high as 0.8997. It is currently correcting lower below 0.8980. An initial support is near the 0.8967 or the 50% Fib retracement level of the recent upward move from the 0.8938 swing low to 0.8997 high.

The first major support is near the 0.8955 level. If the EUR/GBP pair extends its decline, the next stop for the bears could be near 0.8935 or the 50 hourly simple moving average.

Conversely, the pair could resume its upside above 0.8980. The next major resistance is near the 0.9000 and 0.9010 levels. A successful close above the 0.9010 level could open the doors for more gains towards the 0.9040 and 0.9050 levels in the near term.