Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has been all over the place during the trading session on Tuesday after the RBA decided to do nothing. Ultimately, the 0.6650 level above continues to offer significant resistance. The fact that we did pull back from there does suggest that perhaps we are ready to go back and forth in the larger consolidation area.

The 0.6450 level underneath would be a significant support level and with that being said I think this is a situation where the market is going to continue to simply look for some type of longer term directionality. After all, the Australian dollar is highly levered to growth but it’s also highly levered to commodities. It’s also attached to the Chinese economy as well, so all of these things moving around at the same time will have a major influence on how we trade.

On the other side of the equation, you have the US dollar which of course is highly influenced by the interest rates in America which have been stubbornly strong. With that being the case, I think you’ve got a situation where we are more likely than not going to be very noisy and just continue to see a lot of erratic behavior, but I think at this point that we are going to continue to see this area up here as a pretty significant barrier.

And it’s possible that we just end up going back and forth and trade in the overall area that we’ve been in. As a matter of fact, I think that most major pairs are going to be somewhat sideways in general and as we’re at the top of the range, it’s very possible that we could see some exhaustion.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

More From FXEMPIRE:

• EUR/USD struggled to retest the 1.0800 region once again.
• The US Dollar rose to two-day highs despite lower yields.
• The Fed’s Kashkari said the bank might not need to cut rates this year.

The daily bounce of the US Dollar (USD) sparked a fresh knee-jerk and prompted EUR/USD to give away part of the four-session move higher on Tuesday. Once again, the pair fell short of retesting or surpassing the pivotal 1.0800 region, which marks the so-far weekly tops.

The pick-up in the Dollar’s upside momentum followed another negative session in US yields across different maturities as investors continued to assess the recent Federal Reserve’s (Fed) decision to maintain its interest rates unchanged, alongside disappointing figures from April’s Nonfarm Payrolls (+175K).

It is worth recalling that during the Fed meeting, the Committee reaffirmed its readiness for rate adjustments while expressing concerns about inflation and potential economic stability risks. Moreover, the central bank hinted at a slowdown in the pace of balance sheet reduction, while Chair Jerome Powell suggested that the next policy move is unlikely to involve a rate hike.

Looking at the longer term, occasional Dollar weakness is anticipated to be transitory due to deferred expectations of a possible Fed interest rate cut later in the year.

Meanwhile, the monetary policy atmosphere remained unaltered, accentuating the contrast between the Fed and other G10 central banks, particularly the European Central Bank (ECB).

On the latter, recent statements from ECB officials hinted at the likelihood of the ECB commencing its easing cycle in June, sparking speculation about three interest rate cuts (equivalent to 75 basis points) for the remainder of the year. Doubts remain on the rise, however, regarding the potential next decisions by the central bank beyond the summer break.

Looking ahead, the relatively subdued economic fundamentals in the Eurozone, coupled with the resilience of the US economy, bolster expectations for a stronger Dollar in the medium term, particularly considering the growing likelihood of the ECB cutting rates well before the Fed.

Given this outlook, further weakness in EUR/USD should be considered a possibility in the medium term.

EUR/USD daily chart

EUR/USD short-term technical outlook

On the upside, EUR/USD is projected to face first resistance at the May high of 1.0812 (May 3), which comes before the intermediate 100-day SMA of 1.0836 and the April top of 1.0885 (April 9). North of here is the March peak of 1.0981 (March 8), prior to the weekly high of 1.0998 (January 11), all before reaching the psychological threshold of 1.1000.

Looking south, a break of the 2024 bottom of 1.0601 (April 16) might indicate a return to the November 2023 low of 1.0516 (November 1). Once this region is cleared, spot might dispute the weekly low of 1.0495 (October 13, 2023) ahead of the 2023 bottom of 1.0448 (October 3) and the round milestone of 1.0400.

The 4-hour chart shows the pair entering some consolidative range. Against that, there is an immediate up-barrier at 1.0812, seconded by 1.0885. Meanwhile, 1.0745 offers early support, ahead of 1.0649 and 1.0601. The relative strength index (RSI) lost momentum and receded to around 54.

• EUR/USD struggled to retest the 1.0800 region once again.
• The US Dollar rose to two-day highs despite lower yields.
• The Fed’s Kashkari said the bank might not need to cut rates this year.

The daily bounce of the US Dollar (USD) sparked a fresh knee-jerk and prompted EUR/USD to give away part of the four-session move higher on Tuesday. Once again, the pair fell short of retesting or surpassing the pivotal 1.0800 region, which marks the so-far weekly tops.

The pick-up in the Dollar’s upside momentum followed another negative session in US yields across different maturities as investors continued to assess the recent Federal Reserve’s (Fed) decision to maintain its interest rates unchanged, alongside disappointing figures from April’s Nonfarm Payrolls (+175K).

It is worth recalling that during the Fed meeting, the Committee reaffirmed its readiness for rate adjustments while expressing concerns about inflation and potential economic stability risks. Moreover, the central bank hinted at a slowdown in the pace of balance sheet reduction, while Chair Jerome Powell suggested that the next policy move is unlikely to involve a rate hike.

Looking at the longer term, occasional Dollar weakness is anticipated to be transitory due to deferred expectations of a possible Fed interest rate cut later in the year.

Meanwhile, the monetary policy atmosphere remained unaltered, accentuating the contrast between the Fed and other G10 central banks, particularly the European Central Bank (ECB).

On the latter, recent statements from ECB officials hinted at the likelihood of the ECB commencing its easing cycle in June, sparking speculation about three interest rate cuts (equivalent to 75 basis points) for the remainder of the year. Doubts remain on the rise, however, regarding the potential next decisions by the central bank beyond the summer break.

Looking ahead, the relatively subdued economic fundamentals in the Eurozone, coupled with the resilience of the US economy, bolster expectations for a stronger Dollar in the medium term, particularly considering the growing likelihood of the ECB cutting rates well before the Fed.

Given this outlook, further weakness in EUR/USD should be considered a possibility in the medium term.

EUR/USD daily chart

EUR/USD short-term technical outlook

On the upside, EUR/USD is projected to face first resistance at the May high of 1.0812 (May 3), which comes before the intermediate 100-day SMA of 1.0836 and the April top of 1.0885 (April 9). North of here is the March peak of 1.0981 (March 8), prior to the weekly high of 1.0998 (January 11), all before reaching the psychological threshold of 1.1000.

Looking south, a break of the 2024 bottom of 1.0601 (April 16) might indicate a return to the November 2023 low of 1.0516 (November 1). Once this region is cleared, spot might dispute the weekly low of 1.0495 (October 13, 2023) ahead of the 2023 bottom of 1.0448 (October 3) and the round milestone of 1.0400.

The 4-hour chart shows the pair entering some consolidative range. Against that, there is an immediate up-barrier at 1.0812, seconded by 1.0885. Meanwhile, 1.0745 offers early support, ahead of 1.0649 and 1.0601. The relative strength index (RSI) lost momentum and receded to around 54.

GBP/JPY Forecast Video for 06.04.23

British Pound vs Japanese Yen Technical Analysis

The British pound has shown itself to be somewhat soft during the trading session on Wednesday, but that’s to be expected as we are at the top of the major resistance barrier. Furthermore, late during the day on Tuesday, the market sold off quite drastically to form a massive shooting star for the day, so this suggests that perhaps there are still questions out there about what’s going on with the yen.

The British pound was a little overstretch not only against the yen, but against multiple other currencies as well, so it does make a certain amount of sense that we would see this happen. That being said, I’m not looking for some type of major selloff, I think it’s more likely than not going to be a situation where we just pulled back into previous consolidation, trying to sort out the overall attitude of the markets. With that being said, the ¥166 level continues to look like an area of trouble, so I do think that it is probably only a matter of time before we have to challenge that seriously. Underneath, we have the 50-Day EMA crossing above the 200-Day EMA, suggesting that the “golden cross” could attract buyers.

If we do break down below this moving averages, there are plenty of areas where I would expect to see buyers, reaching all the way down to the ¥159.50 level. In other words, this pullback will more likely than not attract buyers, and therefore it should be thought of as an opportunity to pick up a little bit of value in what has been an extraordinarily bullish market for some time.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

More From FXEMPIRE:

• The late week decline in the GBP/USD exchange rate is an ominous sign and suggests potential losses in the coming days.
• According to forex trading platforms, the pound joined its G10 peers in rising in the aftermath of Friday’s weaker-than-expected US jobs report – a weaker-than-expected US jobs report that raised the odds of the Fed cutting rates before December.

According to trading, the GBP/USD exchange rate rose to just above 1.26 but quickly fell back to pre-job print levels. This comes despite other currencies holding their gains against the dollar, immediately signaling the pound’s weakness.

Meanwhile, this tells us that the market is nervous that the Bank of England will see the slowdown in the US jobs market as the cover it needs to shift to ease monetary policy and cut interest rates sooner rather than later. For his part, both Governor Bailey and his deputy, Dave Ramsden, indicated last month that they believe that the battle against inflation has been won, and that they can begin cutting interest rates before inflation numbers actually confirm this outcome.

Ideally, the bank would like to cut alongside other global central banks to minimize financial volatility, especially exchange rate volatility (as early cuts risk lowering the value of their currencies). Overall, the weak US jobs report increases the scope for the Fed to cut rates sooner, and markets are betting that this will affect the BoE’s thinking. In short, what is considered bearish for the dollar is also bearish for the pound.

Commenting on the most important event for the pound this week, the Bank of England’s announcement, Paul Robson, currency analyst at NatWest Markets, says that the clearest risk to the pound would be if markets eventually move to price in NatWest’s base case of a 100-basis point rate cut this year. At the time of writing, the market was pricing in about half of that amount.

A note from Barclays’ forex research team adds: “The pound is at risk from the BoE at its May 9 meeting.” And “The MPC is gradually shifting to a more dovish tone, as evidenced by Ramsden’s recent speech but also Governor Bailey’s more nuanced comments at the IMF meetings.”

What most economists agree on is the degree of difference in views regarding the Monetary Policy Committee. Now, there is a whole host of thinkers, with Swati Dhingra having long called for lower interest rates, while two members only abandoned their call for further rate hikes in March. Recently, the comments showed that even centrists are divided (chief economist Hugh Bell wants to wait longer, while Conservative Andrew Bailey and Deputy Conservative Dave Ramsden appear ready to cut rates).

Andrew Goodwin, Chief UK Economist at Oxford Economics, says: “After voting as a bloc in recent years, the five internal members seem less united than before.” Analysts at Credit Agricole added, “The BoE’s outlook is somewhat opaquer, as the MPC appears to be more divided on the need for early rate cuts.”

Clearly, this means that there will be “new news” about UK interest rate expectations next Thursday, and the “new news” could move the currency markets.

Additionally, when we think about a bullish scenario for sterling, we imagine that this will involve the Bank doing its best to point out that not much has changed, and that although it is satisfied with the progress regarding inflation, it remains cautious. Consequently, this may reinforce expectations of a rate cut in August. Here we imagine that the British pound is recovering from its highest levels in May last Friday, and the size of any recovery depends on the depth of the ongoing selling operations in the near term.

This week will be busy from the point of view of the Fed’s rate expectations, which is of course the main driver of GBP/USD. On this front, we have a line-up of Fed speakers lined up to give their views on the latest data and what they think it means for the policy outlook. Hence, this could provide some volatility and cause some disruption. Eventually, the most important full releases will not be released until mid-month, the most prominent of which is inflation.

Technical forecasts for the GBP/USD pair today:

According to forex market trading, we were on the verge of declaring the end of the bearish trend for the British pound in 2024 when it broke above the downward trend line on Friday. However, the subsequent failure to sustain the rise means this could be a false breakout, and if the GBP/USD price falls back below the trend line in the coming days, it could rise to 1.22 in May, historically a very bad month for this exchange rate.

At the time the image was taken on the chart, the exchange rate had actually fallen below the 200-day moving average, indicating that an area of massive resistance may be thwarting the uptrend. Our forecast rule for this week is that while the exchange rate is below 200 DMA in a downward trend, while above it there is an upward trend.

Perhaps, the market just needs more information before reversing the trend. A significant portion of this information will be provided next Thursday when the Bank of England presents its latest guidance and forecasts regarding interest rates, which may confirm a preference for a rate cut in June. Ultimately, this means that further repricing will be needed in UK bond markets, to the detriment of sterling.

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• The Japanese yen has once again weakened past 154 yen to the dollar, giving up last week’s gains even after top currency diplomat Masato Kanda said the government is ready to combat disorderly and speculative forex moves.
• However, Kanda declined to confirm whether Japanese authorities were behind last week’s suspected intervention when the yen rebounded by as much as 5.2% from its lowest level.
• Now, the USD/JPY exchange rate is stable around the resistance level of 154.60 at the time of writing.

Overall, Bank of Japan data indicates that it spent approximately $60 billion to defend the currency. Meanwhile, analysts said that the move only bought the Japanese authorities some time as market fundamentals remained bearish for the Japanese yen. For her part, US Treasury Secretary Janet Yellen also said over the weekend that interventions should be rare, and consultations should be held, indicating a lack of coordination between Japan and the United States on forex policy.

According to forex trading, the dollar index has stabilized above 105 today, Tuesday, as investors continue to assess the Federal Reserve’s monetary policy expectations considering recent central bank comments. New York Fed President John Williams said rate cut decisions would be data-dependent, while Richmond Fed President Thomas Barkin expressed confidence that inflation will fall to 2% as the full effects of higher interest rates take hold. Last week, the dollar index had fallen by about 1% as the Fed kept rates steady and Chairman Powell ruled out raising rates again to combat stubbornly high inflation, reiterating the central bank’s bias toward easing despite the timing lag.

According to the results of the economic calendar, the data also demonstrated that the US economy added a total of 175,000 jobs in April, down from the revised 315,000 added in March and below market expectations of 243,000. Currently, markets are pricing in 45 basis points of total cuts this year, with the November move fully priced in.

USD/JPY Technical Analysis and Expectations Today:

As we mentioned before, the continued discrepancy between the US central bank’s strict policy and the Bank of Japan. In addition to the continuation of speculation on the yen, will ensure that bulls control the performance of the price of the US dollar against the Japanese yen (USD/JPY).

Therefore, it is the closest opportunity to return to test the resistance levels of 155.20 and 156.00 until a response. Furthermore, markets and investors reacted to the statements of US Federal Reserve officials throughout this week. Technically, the stronger downward shift in the dollar’s direction against the Japanese yen requires moving towards the support levels of 152.00 and 150.00, respectively.

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• The euro rallied slightly during the early hours on Monday as it looks like we are threatening the 200 day EMA.
• That being said, I do think that you have to pay close attention to this area because it is a potential resistance barrier that might be difficult to overcome.
• This is an area that I think could come into the picture as a major decision just waiting to happen at this point.

If we do, then the 1.0850 level gets targeted next. That being said, we also have to look at this through the prism of a market that if we fall, then the 1.07 level could be a target. Ultimately, this is a scenario where traders will probably look to the interest rates in America to see whether or not they continue to tick higher or if they sell off. With that being said, the market has been very sensitive to the idea of what’s going on in the bond market. So do make sure to pay attention.

Central Bank Actions

The central banks both look likely to cut, but the Federal Reserve is going to be cutting much later than the ECB. And if that’s the case, we’re probably going to continue to see the US dollar strength. And with that being said, I’m looking for some type of value play based on a weak US dollar and then perhaps exhaustion in the euro. Over the longer term, if we were to break down below 1.07, then 1.06 gets targeted followed by 1.05. If we do rally, it’s probably a general anti-US dollar trade. I don’t like the euro. I don’t like it here, but I don’t have the price action to start shorting the EUR/USD pair quite yet. 

That being said, the market will be one that we have to pay attention to, as it is also a scenario where we look at the action as a proxy for the strength or weakness of the United States Dollar, as the Euro is considered the “anti-dollar.” This market will continue to be one I watch to get a grip on the USD strength or weakness, and how it could come into play against various currencies around the world.

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• GBP/USD retreated below 1.2550 after closing in the green on Monday.
• The 200-day SMA aligns as key pivot level at 1.2550.
• The pair could stretch lower in case safe-haven flows return.

GBP/USD came within a touching distance of 1.2600 but erased a large portion of its daily gains in the late American session on Monday. The pair edges slightly lower in the early European session on Tuesday and was last seen trading a few pips below 1.2550.

Improving risk mood made it difficult for the US Dollar (USD) to find demand on Monday. During the American trading hours, however, comments from Federal Reserve officials helped Treasury bond yields rebound and allowed the USD to stay resilient against its rivals. 

NY Fed President John Williams said that there will eventually be rate cuts but noted that it was worrisome when monthly inflation prints come in higher. Additionally, Richmond Fed President Thomas Barkin argued that the strong labor market will give the Fed more time to gain confidence that inflation will fall toward the 2% target.

In the absence of fundamental drivers and high-impact data releases, the risk perception could impact GBP/USD’s action in the second half of the day.

At the time of press, US stock index futures were trading mixed. A bullish opening in Wall Street could limit the USD’s gains and help GBP/USD hold its ground. 

According to latest developments, Israel military has taken control of the Palestinian side of the Rafah crossing. Later in the day, ceasefire talks are expected to take place in Egypt. In case geopolitical tensions ease, risk flows could return to markets. 

GBP/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart declined toward 50, highlighting a loss of bullish momentum.

The 200-day Simple Moving Average (SMA) aligns as key pivot level at 1.2550. If GBP/USD confirms that level as support, 1.2600 (Fibonacci 50% retracement of the latest downtrend) could be seen as next resistance before 1.2665 (Fibonacci 61.8% retracement).

In case GBP/USD stays below 1.2550, buyers could stay on the sidelines. In this scenario, supports could be seen at 1.2500 (psychological level, static level), 1.2475 (100-period SMA on the 4-hour chart) and 1.2445 (Fibonacci 23.6% retracement).

• GBP/USD retreated below 1.2550 after closing in the green on Monday.
• The 200-day SMA aligns as key pivot level at 1.2550.
• The pair could stretch lower in case safe-haven flows return.

GBP/USD came within a touching distance of 1.2600 but erased a large portion of its daily gains in the late American session on Monday. The pair edges slightly lower in the early European session on Tuesday and was last seen trading a few pips below 1.2550.

Improving risk mood made it difficult for the US Dollar (USD) to find demand on Monday. During the American trading hours, however, comments from Federal Reserve officials helped Treasury bond yields rebound and allowed the USD to stay resilient against its rivals. 

NY Fed President John Williams said that there will eventually be rate cuts but noted that it was worrisome when monthly inflation prints come in higher. Additionally, Richmond Fed President Thomas Barkin argued that the strong labor market will give the Fed more time to gain confidence that inflation will fall toward the 2% target.

In the absence of fundamental drivers and high-impact data releases, the risk perception could impact GBP/USD’s action in the second half of the day.

At the time of press, US stock index futures were trading mixed. A bullish opening in Wall Street could limit the USD’s gains and help GBP/USD hold its ground. 

According to latest developments, Israel military has taken control of the Palestinian side of the Rafah crossing. Later in the day, ceasefire talks are expected to take place in Egypt. In case geopolitical tensions ease, risk flows could return to markets. 

GBP/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart declined toward 50, highlighting a loss of bullish momentum.

The 200-day Simple Moving Average (SMA) aligns as key pivot level at 1.2550. If GBP/USD confirms that level as support, 1.2600 (Fibonacci 50% retracement of the latest downtrend) could be seen as next resistance before 1.2665 (Fibonacci 61.8% retracement).

In case GBP/USD stays below 1.2550, buyers could stay on the sidelines. In this scenario, supports could be seen at 1.2500 (psychological level, static level), 1.2475 (100-period SMA on the 4-hour chart) and 1.2445 (Fibonacci 23.6% retracement).

Beyond the numbers, investors should monitor FOMC member commentary. Reactions to the US Jobs Report and recent inflation figures could move the dial. FOMC member Neel Kashkari is on the calendar to speak.

Short-term Forecast

Near-term trends for the USD/JPY hinge on service sector data, wage growth, and household spending figures from Japan. Better-than-expected numbers could fuel speculation about a BoJ interest rate hike. However, investors should also consider Fed chatter amidst rising expectations of a September Fed rate cut.

USD/JPY Price Action

Daily Chart

The USD/JPY sat above the 50-day and 200-day EMAs, sending bullish price signals.

A USD/JPY break above the 155 handle would support a move toward the 158 handle. A return to the 158 handle could give the bulls a run at the April 29 high of 160.209.

Service sector PMI numbers from Japan and central bank commentary warrant investor attention.

Alternatively, a USD/JPY break below the 50-day EMA could signal a drop to the 151.685 support level.

The 14-day RSI at 51.33 indicates a USD/JPY move to the 158 handle before entering overbought territory.

• The British pound has fallen again during the trading session on Friday, to seeing the crucial 50-Day EMA.
• What’s even more important to me though is the fact that we are in an area that has a lot of noise and it, as we had consolidated previously.
• At this point, I can only ask the question as to whether or not this is the major dip that turns the market around, or if it is a situation where we continue to plunge.

At this point, I’m looking at the ¥190 level as a major barrier for short-sellers, and I do think that eventually we will get a little bit of a bounce. I am keeping an eye on the ¥192.50 level, because we can turn around a break above there, then I’m willing to get long again. After all, the interest rate differential between the 2 economies is wide enough to drive a truck through, and therefore you do get paid to hang on to this pair. That doesn’t necessarily mean that it has to go higher, but it certainly makes the move higher a lot less painful than a move lower.

Bank of Japan

Keep in mind that the biggest driver of where we go next is going to be the Bank of Japan, as they have intervened a few times recently, and therefore they have strengthen the Japanese yen. That being said, it doesn’t necessarily look like they have changed the trend, so I’m just simply waiting for other people to get involved in the market before start buying again. I made quite a bit of money via the swap over the last couple of months, and I plan on doing that again.

From a longer-term standpoint, the Bank of Japan can’t do much as far as interest rates are concerned, mainly due to the fact that Japan has an even worse debt problem than the United States, which is really saying something. At this point, this is a market that should continue to go higher, but a little bit of patience probably goes a long way as you will get paid to simply wait for traders to get involved. However, if we were to break down below the 189 you level, then it will be interesting to see what happens next.

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The U.S. dollar, as measured by the DXY index, was a tad softer on Monday in a context of mixed U.S. Treasury yields and thinner liquidity in the FX space, with UK markets closed for a bank holiday. Despite this, the dollar’s decline wasn’t uniform – it weakened against major currencies like the euro and the pound but strengthened against the yen.

FX MARKET PERFORMANCE

Source: TradingView

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Taking Monday’s fluctuations into consideration, the DXY index is down more than 1.4% from its April highs, although it has rebounded slightly from its recent trough established last Friday. Nevertheless, bulls have been clearly on the defensive over the past few trading sessions, notably following the Federal Reserve’s dovish tone at its last gathering and disappointing U.S. employment data.

The Fed’s intention to ease despite renewed inflation concerns, which was the takeaway from last week’s FOMC meeting, coupled with weaker-than-anticipated job creation/cooling wage pressures in April, has triggered a sharp pullback in bond yields in May, emboldening new rate cut bets for the year after they were sharply reduced late last month. These developments have evolved into a significant headwind for the U.S. currency.

Gazing ahead, the U.S. economic calendar lacks high-impact events that could spark major bouts of volatility in the upcoming days. This could allow current forex trends to consolidate for some time without wild price swings. However, the near-term outlook would need to be revised around mid-May, when the next set of U.S. CPI figures is due. This report will offer fresh insights into the current inflationary landscape, crucial for informing the Fed’s future decisions and timeline to start slashing borrowing costs.

For a complete overview of the EUR/USD’s technical and fundamental outlook for the coming months, make sure to download our complimentary Q2 forecast!

EUR/USD FORECAST – TECHNICAL ANALYSIS

EUR/USD moved up on Monday and made its way towards the 1.0800 handle, coming within striking distance from taking out both its 50-day and 200-day simple moving averages. Bears must ensure that prices remain under these technical indicators to stall the bullish momentum; any lapse might trigger a rally towards trendline resistance at 1.0830, followed by 1.0865, a key Fibonacci barrier.

In the event of a bearish turnaround from current levels, traders should closely watch 1.0750 and 1.0725 as critical support areas. Below these thresholds, the focus will shift to 1.0695, followed by 1.0645. A retest of the latter zone could see the pair stabilize before mounting a comeback again. However, if a breakdown occurs, the possibility of a decline towards the 1.0600 mark cannot be ruled out.

EUR/USD PRICE ACTION CHART

EUR/USD Chart Created Using TradingView

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GBP/USD FORECAST – TECHNICAL ANALYSIS

GBP/USD also advanced on Monday, recapturing its 200-day simple moving average and steadily approaching confluence resistance between 1.0610 and 1.0630 – an area that marks a convergence of the 50-day SMA with two significant trendlines. Buyers may find it challenging to breach this technical hurdle; however, a bullish breakout could spur a move towards 1.2720.

Alternatively, if the bears rouse from their slumber and steer prices beneath the 200-day SMA, support extends from 1.2515 to 1.2500. Cable needs to hold above this floor to prevent selling pressure from intensifying; failure to do so could create the right conditions for a plunge towards 1.2430. On further weakness, all eyes will be on the psychological 1.2300 level.

GBP/USD PRICE ACTION CHART

GBP/USD Chart Created Using TradingView