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Technical Update - EURUSD and GBPUSD: Correction time, but how much before resuming downtrend?

Forex 2 minutes to read
Kim Cramer Larsson

Technical Analyst, Saxo Bank

EURUSD and GBPUSD are experiencing rebounds after a significant sell-off.
EURUSD could rebound up to 1.0710, while the rebound in GBPUSD might continue to 1.2525 and possibly even higher.
However, the overall trends for both currencies remain bearish, and selling pressure is expected to resume once the rebounds are complete.

The sell-off in EURUSD broke through the support level at around 1.0660 and reached the 1.764 projection at 1.06. A rebound has since occurred, which is likely to extend to the 0.382 retracement at 1.0710.

The RSI is showing negative sentiment without any divergence, suggesting that EURUSD is likely to trade lower following a correction.

This correction could continue up to the 0.618 retracement at 1.0777, a scenario that might unfold if the RSI closes above its falling trendline. If RSI is being rejected at the falling trendline, the downtrend is likely to resume, with downside potential to the 1.0550-1.05 level

eurusd d 1804
Source all charts and data: Saxo Group

GBPUSD is currently rebounding from the strong support level at around 1.2410, with potential to rise further to the 0.382 retracement at 1.2525.

The strength indicator RSI is showing negative sentiment without divergence, suggesting that GBPUSD is likely to trade lower after this correction.
If the RSI closes above its falling (blue) trendline, the GBPUSD correction could extend to 1.2557, potentially reaching the 0.618 retracement at 1.2594. However, if the RSI is rejected at its falling trendline, the correction may end, and GBPUSD could resume its downtrend.

Should GBPUSD break below 1.2410, there is minor support at around 1.2375, with no strong support until around 1.2225.

gbpusd d 1804


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