Technical Update - GBPUSD dropping to levels not seen since 1980's. EURGBP breaking key resistance. Where to next?
Kim Cramer Larsson
Technical Analyst, Saxo Bank
GBPUSD is taking lows at dropping below 1.14 and is now trading in territory not seen since 1985! Back then GBPUSD was spiking down to around 1.05 before Central banks joined together to lift it.
Will they come to rescue this time around?
If GBPUSD closes the week below 1.14 and RSI closes the week below its rising trendline there could be more downside in store for GBPUSD.
The latest correction here in Q3 has reached 1.764 projection and could short term extend to 2.00 projection i.e., 200% of the correction peak and trough, at 1.1226.
However, looking at the entire 2020-2022 up-and down move 1.382 Fibonacci projection of that is 1.0323.
To reverse this very bearish picture GBPUSD needs to close above 1.2295.
If this current upward move is top be just a long as the uptrend from Q1 till Q2 EURGBP should reach 0.8858 which is around the 0.618 Fibo retracement of the Q3 2020 through Q1 2022 downturn.
However, the current bullish move is likely to be longer than first move to test 0.8720 resistance taking EURGBP to the 0.764 retracement and the 1.382 extension around 0.9050. But a spike up to the 1.618 extension at 0.92 is not out of the question.
To reverse this bullish picture EURGBP needs to drop below 0.8395.
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