CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money. CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

EUR/USD and GBP/USD under pressure while EUR/GBP consolidates

EUR/USD and GBP/USD ease off preceding FOMC while EUR/GBP pauses near resistance.

​EUR/USD slips back towards channel support line ahead of FOMC

EUR/USD is revisiting its two-month channel support line at $1.1307 which held last week, but this week may well give way ahead of key policy decisions from the US Federal Reserve (Fed) on Wednesday.

A fall through the channel support line at $1.1307 would push the late December and early January lows at $1.1274 to $1.1272 to the fore. Further down lie the mid-December low at $1.1222 as well as the November trough at $1.1186, both of which would become downside targets on a slip through the $1.1272 early January low.

Immediate downside pressure will remain in play while the cross stays below the 16 January high at $1.1369 and, more importantly, the late November and December highs at $1.1383 to $1.1387.

EUR/GBP gives back some of last week’s gains

Last week EUR/GBP made a new year-to-date low at £0.8305, right between the £0.8313 to £0.8277 December 2016, April 2017, December 2019 and February 2020 lows, before shooting up on weaker than expected UK retail sales.

While the November low and last week’s high at £0.8379 to £0.8381 aren’t bettered, however, overall downside pressure should retain the upper hand with the December 2019 and February 2020 lows at £0.8282 to £0.8277 representing key long-term support which will probably again hold, if revisited. Only if fallen through, would the April 2016 high at £0.8118 be in focus.

A break above resistance at £0.8381 would lead to the £0.8403 October low being eyed. Further up, this year’s high-to-date can be seen at £0.8419.

GBP/USD slides towards the 38.2% Fibonacci retracement at $1.3526

GBP/USD's descent since its $1.3749 mid-January peak has practically taken it back to the 38.2% Fibonacci retracement of the December-to-January advance at $1.3526, below which the mid-November high at $1.3514 is to offer short-term support.

Slightly further down the 6 January low can be found at $1.349 and this year’s low-to-date at $1.3431.

Only a currently unexpected bullish reversal and rise above the 20 January last reaction high and the 200-day simple moving average (SMA) at $1.3662 to $1.3668 would invalidate the current short-term bearish pressure.

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