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

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


Today's Saxo Market Call podcast.
Today's Market Quick Take from the Saxo Strategy Team

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.

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)


Business Hills Park – Building 4,
4th Floor, office 401, Dubai Hills Estate, P.O. Box 33641, Dubai, UAE

Contact Saxo

Select region

UAE
UAE

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

Saxo Bank A/S is licensed by the Danish Financial Supervisory Authority and operates in the UAE under a representative office license issued by the Central bank of the UAE.

The content and material made available on this website and the linked sites are provided by Saxo Bank A/S. It is the sole responsibility of the recipient to ascertain the terms of and comply with any local laws or regulation to which they are subject.

The UAE Representative Office of Saxo Bank A/S markets the Saxo Bank A/S trading platform and the products offered by Saxo Bank A/S.