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British Pound (GBP) Price Outlook: GBP/USD, EUR/GBP Both Close to Reversing

British Pound (GBP) Price Outlook: GBP/USD, EUR/GBP Both Close to Reversing

Martin Essex, MSTA, Analyst

GBP price, news and analysis:

  • GBP/USD is continuing the advance that began in mid-August but resistance is approaching and that could at least hold up any further gains and perhaps lead to weakness.
  • While GBP is rising against USD it is falling against EUR but EUR/GBP is also nearing resistance so a change in direction here too would be no surprise.
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Trend changes may be ahead for GBP/USD and EUR/GBP

With little fundamental news coming from the UK to move the British Pound it has been strengthening recently against the US Dollar but weakening against the Euro. However, both GBP/USD and EUR/GBP are nearing resistance on the charts and that could mean at least a pause for breath and perhaps trend reversals.

As the GBP/USD chart below shows, the pair has been climbing since a low of 1.3602 touched on August 20. However, it is now not far from resistance from a downward-sloping trendline connecting the lower highs recorded over the past two months. That is now at 1.3833 and the pair may struggle to advance further once the trendline is reached.

GBP/USD Price Chart, Daily Timeframe (December 28, 2020 – September 2, 2021)

Latest GBP/USD price chart.

Source: IG (You can click on it for a larger image)

Similarly, EUR/GBP has been strengthening since a low at 0.8450 recorded on August 10 but trendline resistance for the cross sits currently at 0.8644, with further resistance provided by July 20’s high just above it at 0.8670. These levels also therefore need breaking if the advance is to continue.

EUR/GBP Price Chart, Daily Timeframe (March 22 – September 2, 2021)

Latest EUR/GBP price chart.

Source: IG (You can click on it for a larger image)

As for a possible catalyst for such a reversal, next week’s monetary policy meeting of the European Central Bank could provide it if the ECB’s Governing Council is more dovish than currently expected.

--- Written by Martin Essex, Analyst

Feel free to contact me on Twitter @MartinSEssex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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