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Technical Update - EURUSD, GBPUSD, EURGBP and Dollar Index at key support and resistance levels Technical Update - EURUSD, GBPUSD, EURGBP and Dollar Index at key support and resistance levels Technical Update - EURUSD, GBPUSD, EURGBP and Dollar Index at key support and resistance levels

Technical Update - EURUSD, GBPUSD, EURGBP and Dollar Index at key support and resistance levels

Forex 4 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  EURUSD bouncing from key strong support at 1.0635. Could be a larger rebound
GBPUSD continuing its decline and could drop to 1.23 key support before a correction
EURGBP once again testing falling trendline in Descending triangle pattern. Is this the time for a break?
Dollar Index still got room to 105.80 but uptrend stretched

EURUSD is trading in a falling channel pattern. The support around the middle of the Consolidation area at 1.0685 didn’t hold on for long and EURUSD dropped to the key strong support at around 1.0635.

1.0635 is a key support both short- and medium-term. It is the lowest level in the reversal and Consolidation area back in May/June and as can be seen on the weekly chart; 55 Moving Average is coming up around that level adding support and RSI seems to be bouncing from 40 threshold i.e., still in bullish sentiment. A bounce could be seen short-term possibly up to the upper falling trendline on daily chart but a move up to the 0.382 retracement should not be ruled out

The daily 55 and 100 Moving Averages are declining currently just above the 0.382 retracement level thus limiting the upside potential.

There is no RSI divergence on the daily RSI suggesting lower levels on EURUSD, possibly after a correction

If EURUSD closes below 1.0635 the downtrend is set to continue with next support at around 1.05
Source all charts and data: Saxo Group

GBPUSD has dropped below the 200 Moving Average cancelling its RSI divergence. GBPUSD seems set to slide lower to support at around 1.23
1.23 is a key support both short- but especially also on medium-term – see weekly chart

Medium-term GBPUSD has broken bearish out of its rising Wedge like pattern
55 weekly AM is coming up just below the 1.23 support adding to the support strength
RSI still in positive sentiment

A weekly close below 1.23 will confirm downtrend also on the medium-term
However, a rebound from 1.23 should be expected. A rebound that could take GBPUSD to test the upper falling trend line on the daily chart

EURGBP is testing the upper falling trendline in what could be a Descending triangle like pattern. Break out is needed for direction and break out direction is 50/50 up/down.

If breaking out bullish there is upside potential to around 0.8750-0.88 but the price should at least move to the highest peak in the triangle i.e., at around 0.87.

Some resistance at around 0.8668
If breaking bearish out of the triangle there is downside potential to 0.8350

Dollar Index uptrend is weakening indicated by RSI divergence, RSI values have been declining as Dollar Index has moved higher.
However, there is no strong resistance until around 105.80

As can be seen from the weekly chart 105.80 is a strong resistance level
The Dollar Index is currently trading above the 55 weekly Moving Average which is declining meaning the underlying sentiment is weighing heavy on the Index.
A correction could be imminent and quiet possible before reaching the 105.80 resistance.

Some support at around 104.45. Strong support at around 102.86

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