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EUR/USD and EUR/GBP struggle as GBP/USD heads lower

The euro continues to be under pressure against both the dollar and the pound while GBP/USD formed a minor top.

Transcript

EUR/USD continues to struggle

EUR/USD continues to be subdued and still has the late-December low and also the November-to-December channel support line at $1.1274 to $1.1262 in its sights. Further support lies between the 7 and 20 December lows at $1.1237 to $1.1222, as well as at the November low at $1.1186 which remains in focus as well. 

Immediate downside pressure should be maintained while the cross stays below the $1.1346 level, the 5 January high. Only a currently unexpected advance above this level would put the mid-December and 29 December highs at $1.136 to $1.1369 back on the plate.  

Key resistance remains to be seen between the late-November and December peaks at $1.1382 to $1.1386. While the cross stays below it, the one-year downtrend stays firmly entrenched.

EUR/GBP looks towards recent lows

EUR/GBP weighs on this year’s low to date at £0.8335, a slide through which would eye the December 2016, April 2017, December 2019 and February 2020 lows at £0.8313 to £0.8277. This area represents key long-term support which is expected to withstand the first test. 

Initial resistance remains to be seen between the October and November lows at £0.8381 to £0.8403. While the next higher early-January high at £0.8418 isn’t overcome, the downtrend which has been in place since September last year, remains intact. 

GBP/USD forms a short-term top

GBP/USD formed a minor top at $1.3598 in early January which has been accompanied by negative divergence on the daily 9-period RSI, pointing towards lower levels being seen. 

A retest of the one-month uptrend line at $1.351 is likely to unfold while $1.3598 caps with yesterday’s low at $1.3499, representing another technical target. Failure there would probably push the $1.3412 to $1.3402 support zone to the fore. It consists of the late-September low and the 38.2% Fibonacci retracement of the December advance.  

Further, more significant support can be found between the mid-November low and the late-November to mid-December highs as well as the 50% retracement at $1.3375 to $1.3353. 

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