GBP/USD Technical Analysis
The British pound initially fell as well, but then turned around to show signs of life as the 1.34 level is getting tested. The 1.34 level is, of course, an area that’s been important a couple of times in the past, and as a result, it will be worth watching. We also need to consider that the Bank of England is likely to cut, which comes into play as well, because we have to wait and see whether the Bank of England appears likely to start loosening monetary policy rapidly.
All things being equal, this is a pair that I think is somewhat like the euro in the sense that we are just waiting to figure out whether or not the central banks are going to follow the market’s wishes or if there is going to be hesitation. Ultimately, I think we’ve got a decision to make, and we’ll be making it soon.
EUR/GBP Technical Analysis
The Euro initially tried to rally against the pound but then gave back the initial part of the gains. So at this point, I think you have to look at this through the prism of a market that still looks like it’s trying to top but still has a lot of fight left in it, and it is technically in an uptrend. The eight candles or so over the last move have been a period of consolidation followed by a jolt higher, but it looks like we just can’t get above the 0.88 level. If we were to break down below the 0.8725 level, then I think that confirms a lower high, and then we start to talk about breaking down to 0.86.
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