Technical update - Sterling facing massive weakening against USD and EUR Technical update - Sterling facing massive weakening against USD and EUR Technical update - Sterling facing massive weakening against USD and EUR

Technical update - Sterling facing massive weakening against USD and EUR

Forex 2 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank Group

Summary:  Sterling is facing potential massive weakening against USD and EUR. GBPUSD rejected at 1.2445 and seems to be unfolding a double top pattern with potential to 1.12 area
EURGBP broke above key resistance and is now looking at 0.90 possibly 0.92


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GBPUSD
the resistance at 1.2445 seems to be too strong for GBPUSD to break and sellers have now taken control. GBPUSD is testing the lower rising trendline and is likely to break below. If it does there is no strong support until around 1.1840 but 200 and 100 daily moving averages will provide some support.
A close below 1.1840 will confirm a Double Top pattern unfolding with downside potential to around 1.1145 support illustrated by the two vertical arrows.
For GBPUSD to demolish the scenario a close above 1.2445 is needed.

Data and chart source: Saxo Group

Medium term: GBPUSD was rejected at the cloud and is forming a Evening Doji like pattern which is a indication of a top and reversal.
A weekly close below 1.1840 medium-term bear trend has resumed. Weekly RSI has been rejected at the 60 threshold twice now i.e., it is resuming negative sentiment.
the potential Double Top target is close to the 0.618 retracement of the massive bounce in Q4 2022.

EURGBP Closed yesterday above resistance at around 0.89 confirming uptrend with short-term potential to 0.90. where it will find some resistance and the 1.618 projection of the latest correction before the break out.
For this bullish scenario to be reversed a close below 0.8720

 

Medium term: EURGBP has resumed uptrend after a correction. Weekly RSI is bullish with no divergence indicating higher EURGBP. Minor resistance at around 0.8935-0.90.
A close above 0.90 will pave the way towards 0.92.
Monthly chart shows how EURGBP has moving in a wide sideways range with slightly lower spikes.
If we are going to see a another spike in EURGBP approx. same height or maybe slightly lower than the previous spikes a potential target would be around 0.90-0.9250.

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