Macro: Sandcastle economics
Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.
You can access both of our platforms from a single Saxo account.
Technical Update - Sterling strengthening: GBPUSD and EURGBP likely to break key levels. EURUSD upside potential could be limited
Kim Cramer Larsson
Technical Analyst, Saxo Bank
- GBPUSD in strong bullish trend that could take it to 1.30 short-term
- EURGBP has resumed downtrend likely to re-test 0.84 key support Downside potential to 0.8345, possibly lower
- EURUSD testing minor resistance. Short-term upside potential to 1.09. Medium-term could push to 1.10 but upside likely limited
GBPUSD could push higher to the 1.382 projection at 1.2955, possibly up to 1.30–1.3015 short-term.
Medium-term, the weekly chart shows 1.29 is key.
A daily close above there means no strong resistance until the July 2023 peak around 1.3140.
To demolish this bullish trend, a daily close below 1.27 is required, but to reverse the trend, a close below 1.2610 is required.
EURGBP is hovering around the support at around 0.8428.
However, the pair has resumed its downtrend as confirmed with RSI closing below the 40 threshold, strongly indicating EURGBP is to trade lower. A re-test of the key support at around 0.84 is in the cards.
Medium-term, the weekly chart shows EURGBP is in a bearish trend supported by negative sentiment on RSI. The 0.8345 level is in sight, but the pair could sell off down to the 2022 lows around 0.8230–0.82.
To reverse this bearish outlook, a daily close above 0.85 is required.
However, the pair has resumed its downtrend as confirmed with RSI closing below the 40 threshold, strongly indicating EURGBP is to trade lower. A re-test of the key support at around 0.84 is in the cards.
Medium-term, the weekly chart shows EURGBP is in a bearish trend supported by negative sentiment on RSI. The 0.8345 level is in sight, but the pair could sell off down to the 2022 lows around 0.8230–0.82.
To reverse this bearish outlook, a daily close above 0.85 is required.
EURUSD is currently testing minor resistance at around 1.0852. If broken, a push to the 1.09 area is in the cards. The daily RSI is showing positive sentiment, and combined with the daily moving averages, there are indications that EURUSD will break higher.
However, if looking at the weekly chart, the 1.0916 June peak could be a harder nut to crack.
If EURUSD closes above that level, it has reversed the medium-term downtrend EURUSD has been forming since the beginning of the year. But the upside potential could be limited. EURUSD could be locked in between the declining 200 weekly moving average and the rising 100 moving average, likely limiting the upside to around 1.0980–1.10
However, if EURUSD manages to close above 1.0980, there could be upside potential to 1.11. If failing to close above 1.0852, EURUSD could slide back to the 1.08 level, possibly lower
Latest Market Insights
Quarterly Outlook 2024 Q3
Sandcastle economics
-
-
Bonds: What to do until inflation stabilises
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.
-
Equities: Are we blowing bubbles again
Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.
-
FX: Risk-on currencies to surge against havens
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.
-
Commodities: Energy and grains in focus as metals pause
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.