GBP/USD is declining and it is now trading well below the 1.3150 level. EUR/GBP is recovering and it could continue to rise towards the 0.8560 resistance.
Important Takeaways for GBP/USD and EUR/GBP
- The British Pound is showing a lot of negative signs below the 1.3100 level.
- There is a key bearish trend line forming with resistance near 1.3040 on the hourly chart of GBP/USD.
- EUR/GBP is trading in a positive zone above the 0.8500 and 0.8480 support levels.
- There is a short term bearish trend line forming with resistance near 0.8520 on the hourly chart.
GBP/USD Technical Analysis
The British Pound started a strong decline after a massive rally towards 1.3500 against the US Dollar. The GBP/USD pair trimmed most its gains and traded below the 1.3320 and 1.3200 support levels.
Moreover, there was a close below the 1.3200 level and the 50 hourly simple moving average. Finally, there was a break below the 1.3100 support area and the pair traded as low as 1.2978 on FXOpen.
The pair is currently correcting higher above the 1.3000 level. It is testing the 23.6% Fib retracement level of the recent decline from the 1.3132 high to 1.2978 low.
On the upside, there are many hurdles near 1.3030, 1.3040 and 1.3050. Besides, there is a key bearish trend line forming with resistance near 1.3040 on the hourly chart of GBP/USD.
The 50% Fib retracement level of the recent decline from the 1.3132 high to 1.2978 low is also near the 1.3050 level. Therefore, GBP/USD must break the 1.3040 and 1.3050 resistance levels to start a decent recovery.
The next major resistance is near the 1.3100 and 1.3120 levels, above which the pair could continue to rise in the near term.
On the downside, an initial support is near the 1.2980 level, below which GBP/USD sellers could gain momentum. The next major support could be 1.2950, followed by the 1.2920 pivot level.
EUR/GBP Technical Analysis
The Euro started a strong rise from the 0.8275 swing low against the British Pound. The EUR/GBP pair broke many resistances near the 0.8380 and 0.8400 levels to move into a positive zone.
Moreover, there was a close above the 0.8450 level and the 50 hourly simple moving average. Finally, the pair rallied above 0.8500 and traded as high as 0.8555.
It is currently correcting gains below 0.8530. The pair declined below the 23.6% Fib retracement level of the upward move from the 0.8275 low to 0.8555 high.
However, there are many supports on the downside near the 0.8500 and 0.8480 levels. The next major support is near the 0.8450 level. Besides, the 50% Fib retracement level of the upward move from the 0.8275 low to 0.8555 high is near the 0.8450 level.
If there is a downside break below the 0.8450 level, the pair could continue to decline towards the 0.8400 support area in the near term.
Conversely, EUR/GBP might continue to rise above 0.8530 and 0.8550. More importantly, there is a short term bearish trend line forming with resistance near 0.8520 on the hourly chart.
A clear break above the trend line and 0.8530 could start another increase and the pair will most likely climb above the 0.8550 resistance area.