Technical Analyst, Saxo Bank
Summary: Downtrends in EURUSD and GBPUSD are a bit stretched. Corrections from key supports could be seen before downtrends are likely to resume
EURGBP forming Descending triangle pattern. Break out direction is 50/50
Dollar Index still has room up to 105.80 but a short-term correction seems likely
EURUSD is trading in a falling channel pattern and seems to be finding support around the middle of the Consolidation area at 1.0685.
RSI divergence is indicating downtrend exhaustion which could result in a correction. A correction that could take EURUSD 0.382 retracement at 1.0911. However, the 100 and 55 Moving Averages are declining just around that area adding to the overhead resistance limiting the rebound potential.
EURUSD rebound could run out of steam at the 200 Moving Average and the upper falling trendline.
A break below 1.0685 is likely to test the Consolidation area low at 1.0635 and a close below paves the road towards 1.05.
GBPUSD has found support at the 200 Moving Average and could bounce from here. A test of the upper falling trend line could be seen. If GBPUSD is breaking above the trendline a bullish move to the 0.382 retracement at 1.27 is quite likely
However, the upside potential seems fairly limited with the 55 Moving Average and 100 Moving Average coming down adding some resistance
RSI is in negative sentiment without divergence indicating lower GBPUSD levels are likely thus a correction I very likely to be short-lived and limited.
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