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​​EUR/USD, GBP/USD try to stabilize amid heightened Middle East tensions while EUR/GBP pauses

​​Outlook on EUR/USD, EUR/GBP and GBP/USD amid the ongoing Israel/Hamas crisis.

EUR/USD Source: Bloomberg

​​​EUR/USD tries to hold amid heightened Middle East tensions

​Last week’s EUR/USD rejection by the upper July-to-October downtrend channel resistance line at $1.0639 has been followed by a swift sell-off as US consumer price index (CPI) inflation came in slightly higher-than-expected and heightened Middle East tensions led to safe haven flows into the US dollar.

​Below Friday’s low at $1.0496 lies the key $1.0484 to $1.0444 support zone, made up of the mid-November high, 7 December and 6 January lows. Provided it holds, the pair may still bottom out from a medium-term perspective.

​Minor resistance sits at Friday’s $1.0558 high and further up at the previous Friday’s high at $1.06 and then the late September high at $1.0617. Further resistance sits at the May low and mid-September low as well as this week’s high at $1.0632 to $1.0639. Only a rise and daily chart close above these levels would confirm a bottoming formation.

EUR/USD chart Source:

​EUR/GBP recovers from last Friday’s £0.8617 low

EUR/GBP’s descent from its £0.8706 September high has taken it to last week’s £0.8617 low from where the cross is currently recovering ahead of Wednesday’s UK inflation data.

​Good support now sits between the late August high, late September low and last week’s low at £0.8631 to £0.861 while minor resistance comes in at last week’s high at £0.8664. Above it sit the late June and mid-August highs at £0.8658 to £0.8669 which are likely to cap, if reached.

EUR/GBP chart Source:

​GBP/USD tries to stabilize following last week’s sharp sell-off

GBP/USD’s rise from its early October seven-month low at $1.2038, for six straight days to last week’s $1.2337 high was followed by a sharp sell-off as the Israel/Hamas war led to flight-to-safety flows into the greenback.

​A drop through Friday’s low at $1.2123 and the next lower $1.2106 previous Friday low could lead to the early October low at $1.2038 and the psychological $1.20 mark being revisited.

​While Friday’s low at $1.2123 underpins, though, Friday’s high at $1.2225 may be retested. If overcome, the late September high at $1.2271 would be back in the frame.

GBP/USD chart Source:

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