GBP/USD Technical Analysis
The British Pound has rallied quite nicely and looks strong for the day, but it is in the same cluster it has been in for a couple of weeks. So we will have to see how this closes out, but if you can get a daily close above 1.35, then the Pound may have somewhere to go to the upside, maybe 1.37.
The market will continue to be very choppy and very noisy, but ultimately, I think this is a market that you have to watch what happens in the bond markets between UK Gilts and the US Treasury markets; you have to watch the interest rate differential. Right now, it looks like people are favoring the British Pound, but we have not been able to clear this area, and that is something worth paying attention to.
EUR/GBP Technical Analysis
The Euro has fallen against the British Pound, which is not a huge surprise when you compare them both against the US dollar on Monday. But we are still hanging onto this support level right around the 0.8750 level, so if we can break down below 0.87, then we could see this pair drop. I think eventually that might be what plays out here, as we are at an extreme high over the last couple of years, and this pair does like to be very range-bound over longer periods of time. If we rally at this point, the 0.88 level could be a target; anything above there could open up 0.8850.
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