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Technical Update - EURGBP resuming uptrend with potential to 1.3140. GBPUSD rebounding, will it also resume uptrend?
Kim Cramer Larsson
Technical Analyst, Saxo Bank
EURGBP has bounced from the 0.382 retracement and support at around 0.8530, thus resuming its uptrend.
EURGBP is likely to re-test the strong resistance around 0.8620–0.8625. A break of this resistance is likely, supported by the strength indicator RSI, which shows positive sentiment and no divergence
A break and close above 0.8625 is likely to push EURGBP higher, above the resistance at 0.8644, to the 0.8630–0.8683 level short-term.
On the weekly chart, EURGBP has broken above its upper falling trendline. A close above the 0.8645 level could pave the way higher towards strong resistance at around 0.8765 in the medium-term, i.e., end-2024 to early 2025.
An RSI close above the 60 threshold on the weekly chart will confirm and support the bullish outlook for EURGBP.
A daily close below 0.8525 will demolish this bullish scenario, at least in the short-term, and likely send the pair down to 0.8475
EURGBP is likely to re-test the strong resistance around 0.8620–0.8625. A break of this resistance is likely, supported by the strength indicator RSI, which shows positive sentiment and no divergence
A break and close above 0.8625 is likely to push EURGBP higher, above the resistance at 0.8644, to the 0.8630–0.8683 level short-term.
On the weekly chart, EURGBP has broken above its upper falling trendline. A close above the 0.8645 level could pave the way higher towards strong resistance at around 0.8765 in the medium-term, i.e., end-2024 to early 2025.
An RSI close above the 60 threshold on the weekly chart will confirm and support the bullish outlook for EURGBP.
A daily close below 0.8525 will demolish this bullish scenario, at least in the short-term, and likely send the pair down to 0.8475
GBPUSD last week formed a doji morning-like pattern (circled), which signals a bottom and reversal. This scenario has been highlighted in my Daily Technical Update videos published here on SaxoTrader and on my YouTube channel where you can subscribe to daily updates: Cramer's Corner YouTube
GBPUSD has so far rebounded around 50% but could rebound further. However, the key question is whether RSI will close above the 60 threshold or not.
Currently, RSI is showing negative sentiment, but a daily close above 60 will reverse that and support further upside potential for GBPUSD.
A daily close above the 0.618 retracement at 1.29, combined with an RSI close above 60, will support a scenario where GBPUSD is pushing higher to the 2023 peak around 1.3135.
If on the other hand, RSI fails to close above 60 and is instead rejected, last week’s bottom and reversal pattern could be challenged and possibly cancelled.
Medium-term on the weekly chart: GBPUSD is trading in a rising trend/wedge-like pattern. Weekly RSI is showing positive sentiment, supporting higher GBPUSD levels to the 1.3135–1.3145 level.
A close below 1.2660 will establish a bearish trend
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