GBP/USD Technical Analysis

The British pound looks like it is rolling over a little bit. And that’s not a huge surprise because we had that explosive move a couple of days back due to the budget. The question is, will that budget change the trajectory of the economy? The answer, of course, is no. And recently, the Bank of England came within a whisker of cutting the rate. So, I think the market is starting to focus on that again.

At this point, we’ll be watching 1.32 to see if we can break down below it. If we can, then that’s a very negative sign. If we bounce from there, then we could head back into the previous consolidation. And just like in the case of the euro, I think it’s the Federal Reserve that determines the next move.

EUR/GBP Technical Analysis

The euro rallied slightly during the trading session on Monday, but it’s hanging around the 50-day EMA. And I think this is an area that is going to continue to be somewhat noisy. All things being equal, I think we’re just killing time here. But if we were to break down below the 0.87 level, then I think the market really starts to drop. If we rally from here and clear the 0.875 level, then I think we go looking at the 0.8850 level again. That being said, this is a very choppy market. It always is choppy. So, I’m not looking for rapid or quick moves.

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