News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/qv8keXFzHZ
  • Join @IlyaSpivak at 22:00 EST/2:00 GMT for his cross-market weekly outlook webinar. Register here: https://t.co/MKGHc9ae64 https://t.co/JMlT0Wn3DK
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out https://t.co/c51s3IBcEu https://t.co/sbejkd7XT5
  • *Reminder: Weekly Strategy Webinar Monday morning at 8:30am ET - https://t.co/lxd5fZnn4H Mid-Week Market Update on Wednesday at 9:30am ET - https://t.co/8SFBJxNZrA
  • Are you new to trading? Technical analysis of charts aims to identify patterns and market trends by utilising different forms of technical chart types and other chart functions. Get a refresher on technical analysis or begin building your knowledge here: https://t.co/qV3c7a4YR3 https://t.co/CJR61cljOe
  • (AUD Weekly Tech) Australian Dollar May Wilt, Downtrends Resume: AUD/USD, AUD/JPY, AUD/NZD, AUD/CAD https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2021/09/19/Australian-Dollar-May-Wilt-Downtrends-Resume-AUDUSD-AUDJPY-AUDNZD-AUDCAD.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/DedoOKJMXh
  • Entry orders are a valuable tool in forex trading. Traders can strategize to come up with a great trading plan, but if they can’t execute that plan effectively, all their hard work might as well be thrown out. Learn how to place entry orders here: https://t.co/1mnOXUuBpt https://t.co/GQB0ic9Ahe
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here: https://t.co/vg7w10la3j https://t.co/lx3cMSpZNc
  • Further your forex knowledge and gain insights from our expert analysts on EUR with our free guide, available today: https://t.co/XtydfUNW0y https://t.co/n4NXZUovb0
  • Scoping out next week for trading the market, there are a range of high profile influences including September PMIs, Evergrande and a range of central bank decisions. Top listing on my docket is the #FOMC with my scenarios below. Full analysis: https://www.dailyfx.com/forex/video/daily_news_report/2021/09/18/SP-500-and-Dollar-on-the-Hook-for-Breaks-with-Evergrande-Fed-and-September-Trade-Ahead.html https://t.co/ZdoMJS9fp5
British Pound Technical Outlook: GBP/USD, EUR/GBP Wedge Patterns in Focus

British Pound Technical Outlook: GBP/USD, EUR/GBP Wedge Patterns in Focus

Thomas Westwater, Analyst

GBP/USD, EUR/GBP Technical Forecast – Talking Points

  • GBP/USD rally in question as prices test Rising Wedge trendline resistance
  • Falling Wedge in EUR/GBP forms after prices break below Symmetrical Triangle
  • The recent strength in the British Pound may have Sterling bulls off-guard for now

GBP/USD Technical Forecast: Bearish

The British Pound gained 0.75% versus the US Dollar this past week as traders turned bearish on the Greenback after Treasury Secretary nominee Janet Yellen affirmed the nation’s commitment to maintain a market-priced Greenback. As a result, GBP/USD rose to test the upper bound of a Rising Wedge pattern, breaking above the 1.3700 psychological level in the process.

GBP/USD may continue to trend higher alongside resistance, although the 78.6% Fibonacci retracementlevel from the April 2018 to March 2020 move will come into play, adding another level of potential resistance. Above that, the 1.3800 psychological level will move into focus. These levels are likely to provide resistance even if prices moves outside of the pattern.

Alternatively, a move lower could see prior resistance turn into potential support at the 1.3700 psychological level. The wedge’s support line is the pertinent focal point to the downside, with the 9-day Exponential Moving Average (EMA) and the 20-day Simple Moving Average (SMA) furnishing levels of intermediate support.

GBP/USD Daily Chart

GBP/USD Rising Wedge Chart

Chart created with TradingView

EUR/GBP Technical Forecast: Neutral

EUR/GBP tested trendline support of a Falling Wedge last week before rebounding to finish the week nearly unchanged. Before testing support, prices fell below a multi-month support level, recording the lowest price since mid-May 2020. The cross is now near its mid-point within the wedge pattern, with the 9-day EMA (blue line) and 50% pseudo-Fibonacci retracement level from the February – March 2020 move proving to be an area of contention.

The Falling Wedge pattern, in contrast to the Rising Wedge discussed above, is inherently bullish. Granted that, EUR/GBP may continue to decline within the pattern as price action develops. Last week’s low at 0.8829 will likely be a decisive level for Euro bulls to defend. However, if Sterling strength prevails, a drop to the 61.8% Fib level, which coincides with an area of major support from early 2020, may unfold.

EUR/GBP’s current panorama has the wedge’s resistance line in clear focus. A move higher will either pierce through the triangle or find rejection and veer lower, with the former possibly giving way to a breakout. Interestingly enough, however, trendline support from a broader Symmetrical Triangle may turn into resistance. Nonetheless, prices would still have a path to trend higher, but a clean breakout could see EUR/GBP extend up to the 38.2 Fib level, just below the triangle’s apex.

EUR/GBP Daily Chart

EUR/GBP Falling Wedge Chart

Chart Created with TradingView

GBP/USD, EUR/GBP TRADING RESOURCES

--- Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the comments section below or @FxWestwateron Twitter

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

DISCLOSURES