GBP/USD could see further weakness [Video]
(Christina Parthenidou – XM)
EUR/JPY aims for higher highs, June’s resistance in focus
EURJPY stepped on the short-term ascending trendline, as it halted last week’s pullback from the new eight-year high of 145.62.
With the price trading comfortably above its upward-sloping simple moving averages (SMAs) and the momentum indicators hovering within the bullish territory despite their flat trajectory, upside moves are more likely than downside ones. Specifically, the RSI is a long distance above its 50 neutral mark, while the MACD is well elevated within the positive zone and near its red signal line.
A durable move above June’s tough ceiling of 144.26 could be the key for an acceleration towards the important long-term resistance line that joins all the highs from August 2020, currently seen around 146.45. A break above the 147.15 barrier could then pave the way towards the 2014 top of 149.76 and the 150 psychological mark, where the ascending line drawn from March lows is positioned.
In the bearish scenario, a cross below the support trendline at 143.40 could confirm an extension towards the 142.29 handle, while lower, the price could meet the 20-day SMA around 141.30. Failure to bounce from there may enhance selling interest towards the 139.50 – 139.10 region.
All in all, EURJPY may push for higher highs in the short term, with traders waiting for a clear confirmation signal above 144.26 to boost buying exposures.
GBP/USD could see further weakness, still strongly negative
GBPUSD is holding above the multi-year low of 1.1350, remaining within the long-term descending channel. The technical oscillators are suggesting some positive movement in the short-term, with the MACD surpassing its trigger line in the negative region, while the RSI is standing above its 30 level. Moreover, the pair is still hovering well below the 20- and 50-day simple moving averages (SMAs).
On the upside, the price could attempt to overcome the 20-day SMA at 1.1570 and retest the previous high at 1.1750, which if successfully broken, could open the door for the 50-day SMA at 1.1845. Should traders continue to buy the pair above that line, resistance could then run towards the 1.1890-1.2000 area, meeting the upper boundary of the channel.
A reversal to the downside, however, could find immediate support at the 1.1350-1.1410 zone, while even lower the market could test the next psychological marks such as 1.1300 and 1.1200. Below that, the lower boundary of the downward pattern may halt bearish actions near 1.1100.
Turning to the long-term picture, the outlook has been bearish over the past seven months and only a decisive close above the 1.2000 handle and, more importantly, above the 200-day SMA at 1.2670, could shift the outlook to bullish.
GBP/USD Forecast: Pound to extend sideways grind in short term
(Eren Sengezer – FXStreet)
– GBP/USD is struggling to make a decisive move in either direction.
– Fed and BoE will announce interest rate decisions later in the week.
– UK’s FSTE 100 Index trades flat following positive opening.
GBP/USD has gone into a consolidation phase above 1.1400 after having closed the first day of the week virtually unchanged. As investors prepare for the US Federal Reserve’s and the Bank of England’s (BoE) policy announcements, the pair is likely to have a hard time finding direction in the near term.
The dollar rally lost its steam on Monday after Nick Timiraos, Wall Street Journal author who leaked the 75 basis points (bps) Fed rate hike in July, refrained from hinting at a 100 bps rate increase in his latest article. In turn, Wall Street’s main indexes managed to post modest recovery gains and allowed GBP/USD to retrace its daily drop.
Early Tuesday, the UK’s FTSE 100 Index trades flat on the day and US stock index futures are down between 0.1% and 0.25%, pointing to a cautious market atmosphere.
Although the US Dollar Index could hold its ground in case the market mood continues to sour in the second half of the day, GBP/USD is likely to continue to fluctuate between key technical levels.
Meanwhile, Reuters reported that trades were pricing in two three-quarter points BoE rate increases by the end of the year. This headline, however, failed to trigger a noticeable market reaction.
August Housing Starts and Building Permits data from the US will be looked upon for fresh impetus later in the day but the risk perception should continue to influence the dollar’s market valuation.
GBP/USD Technical Analysis
GBP/USD was last seen trading near the 20-period SMA on the four-hour chart. Additionally, the Relative Strength Index (RSI) indicator stays slightly below 50, confirming the lack of buyer interest.
On the downside, 1.1400 (psychological level, static level) aligns as initial support before 1.1350 (multi-decade lows) and 1.1300 (psychological level). Resistances are located at 1.1450 (static level), 1.1500 (psychological level) and 1.1550 (100-period SMA).