Technical Update  - Sterling strengthening: GBPUSD and EURGBP likely to break key levels. EURUSD upside potential could be limited

Technical Update - Sterling strengthening: GBPUSD and EURGBP likely to break key levels. EURUSD upside potential could be limited

Forex 3 minutes to read
KCL
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 is closing in on 1.29, a minor resistance. The pair is in a bullish trend supported by positive sentiment on RSI.

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.
Source all charts and data: Saxo Group
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.

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

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