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.
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.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market.
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
You might be interested in…
Find out what charges your trades could incur with our transparent fee structure.
Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.
Stay on top of upcoming market-moving events with our customisable economic calendar.