Euro rally is starting to lose upside momentum while cable remains bid
The euro’s gains are starting to slow but GBP/USD is holding up well.
EUR/USD is beginning to run out of steam ahead of resistance
EUR/USD is still trying to break out of its November-to-January channel but is losing upside momentum along the channel resistance line.
Upside targets are the October-to-early-November lows at $1.1513 to $1.1539. These are likely to stall the current rally in case it doesn’t run out of puff beforehand. Should this not be the case, the advance may extend to the September low at $1.1563.
Good support remains to be seen between the late November and December highs at $1.1386 to $1.1383. While above there, an upside bias remains in play.
EUR/GBP trades along the 55-day simple moving average (SMA) at £0.8352
EUR/GBP continues to range trade above this year’s low to date at £0.8324 and now flirts with the 55-period SMA on the 240-minute chart at £0.8352 with the £0.8366 to £0.8373 resistance zone capping at present. This comes as no surprise since it has already acted as support late last year and as resistance early this year.
While the next higher early January high at £0.8418 isn’t exceeded, the longer-term September-to-January downtrend stays valid.
Only a fall through the recent low at £0.8324 would push the December 2016, April 2017, December 2019 and February 2020 lows at £0.8313 to £0.8277 to the fore. It is where key long-term support can be found.
GBP/USD continues to trade above the 200-day SMA at $1.3691
There is no stopping the GBP/USD rally. Once the 23 September high at $1.3751 has been exceeded, the October high at $1.3835 will be targeted. Further up lies the September peak at $1.3913 around which the currency pair is likely to at least take a short-term breather.
Slips should find support along the 200-day SMA at $1.3691. Further down minor support can be found at the early October highs at $1.3658 to $1.3648.
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