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Technical Update - GBPUSD ripe for a correction. EURGBP taking out key support

Forex 2 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  GBPUSD rejected at key resistance at 1.2666 and is ripe for a correction. Possibly down to 1.2345.
EURGBP breaking key support that could lead to a move to 0.8575.


GBPUSD rejected at key strong resistance at around 1.2666. RSI divergence indicating a correction could unfold.
The is rising trendline offer some support where GBPUSD could bounce from but a break below is likely to lead to a sell-off down to the 0.382 retracement at around 1.2345.

However, if buyers can push GBPUSD to close above 1.2666 a 1.618 projection move to 1.2846 could be seen, possibly with a spike up to 1.2940 – see weekly chart

 

gbpusd d 9may
Source all charts and data: Saxo Group
gbpusd w 9may

EURGBP has broken below support at 0.8716 and is set to drop lower. The 0.8720 support is also the horizontal trendline in a descending triangle like pattern EURGBP has formed over the 3-4 months.
RSI below 40 threshold support the bearish picture with no strong support until around 0.8575

On the medium-term (weekly chart) EURGBP is breaking below its lower rising trendline testing the 200 weekly Moving Average which is declining. 55 Moving Average will offer some support but a bearish move to around 0.8575 is in the cards.

The RSI divergence indicates a correction but RSI. If RSI weekly closes below 40 it will show negative sentiment further adding to the bearish picture.

For EURGBP to reverse this bearish scenario a break above 0.8875 is needed.

eurgbp d 9may
eurgbp w 9may

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