GBP/USD started a downside correction after it tested the main 1.3000 resistance area. EUR/GBP is climbing higher, but it is facing a strong resistance near the 0.8670 level.
Important Takeaways for GBP/USD and EUR/GBP
- The British Pound is currently correcting lower and it broke the 1.2920 support area.
- There are two bearish trend lines forming with resistance near 1.2850 and 1.2880 on the hourly chart of GBP/USD.
- EUR/GBP is climbing higher and it is showing positive signs above 0.8600.
- There is a breakout pattern forming with resistance near 0.8670 on the hourly chart.
GBP/USD Technical Analysis
The British Pound rallied this past week above the 1.2900 resistance area against the US Dollar. The GBP/USD pair even climbed above the 1.2950 and 1.3000 resistance levels.
However, the pair failed to retain gains above 1.3000 and later started a downside correction. There was a break below the 1.2950 and 1.2920 support levels. Moreover, there was a close below 1.2900 and the 50 hourly simple moving average.
The pair even spiked below 1.2800 and formed a low near the 1.2789 on FXOpen. It is currently consolidating losses and corrected above the 23.6% Fib retracement level of the recent decline from the 1.2944 high to 1.2789 low.
However, there are many hurdles for the bulls near 1.2850, 1.2880, and the 50 hourly simple moving average. Moreover, there are two bearish trend lines forming with resistance near 1.2850 and 1.2880 on the hourly chart of GBP/USD.
Besides, the 50% Fib retracement level of the recent decline from the 1.2944 high to 1.2789 low is also near 1.2869 to act as a strong resistance. If there is a downside break below the 1.2800 support, the pair could continue to decline.
The next key support is near the 1.2750 level, where the bulls are likely to appear. On the upside, GBP/USD needs to surpass the 1.2850 and 1.2880 resistance levels to set the pace for more gains in the near term.
EUR/GBP Technical Analysis
The Euro remained well bid above the 0.8600 support area against the British Pound. The EUR/GBP pair even broke the 0.8650 resistance recently and climbed towards the 0.8680 resistance area.
However, the pair failed to gain strength and corrected below the 50 hourly simple moving average. It broke the 0.8650 level and traded as low as 0.8628. At the moment, the pair is moving higher and is trading above the 0.8640 level.
The pair is trading near the 38.2% Fib retracement level of the recent decline from the 0.8670 high to 0.8628 low. On the upside, there is a strong resistance forming near the 0.8670 and 0.8680 levels.
Moreover, there is a breakout pattern forming with resistance near 0.8670 on the hourly chart. An intermediate resistance is near 0.8655 and the 50% Fib retracement level of the recent decline from the 0.8670 high to 0.8628 low.
Therefore, a clear break above the 0.8670 and 0.8680 resistance levels is needed for more gains in the near term. The next stop for buyers could be near the 0.8700 level.
Conversely, if there is a fresh decline below the 0.8620 support, EUR/GBP could move into a bearish zone. The next major supports are near the 0.8600 and 0.8580 levels.