EUR/USD, GBP/USD And EUR/GBP Forecasts – Currencies Continue to See Choppiness

EUR/USD Technical Analysis

The euro initially rallied a bit during the trading session here on Monday, but it is starting to give back gains again, just like it did on Friday. All things being equal, this is a market that I think is essentially on hold at the moment, as we have the Federal Reserve interest rate decision on Wednesday. But the dynamics of this pair are interesting because the ECB is expected to hold rates, so that has helped firm the euro slightly. And the Federal Reserve is expected to cut rates on Wednesday, but the question then becomes, what did they say during the press conference?

It is because of this, I think the next day or two is probably going to be very choppy and very sideways. As traders wait for the next data point that truly matters, we are in the middle of a consolidation area. That being said, all things being equal, I still favor the downside. But I think we need something to get us going to the downside, such as Jerome Powell giving us a cut, but maybe suggesting that the Fed is hesitant to cut rapidly.

GBP/USD Technical Analysis

The British pound looks like it is rolling over a little bit. And that's not a huge surprise because we had that explosive move a couple of days back due to the budget. The question is, will that budget change the trajectory of the economy? The answer, of course, is no. And recently, the Bank of England came within a whisker of cutting the rate. So, I think the market is starting to focus on that again.

At this point, we'll be watching 1.32 to see if we can break down below it. If we can, then that's a very negative sign. If we bounce from there, then we could head back into the previous consolidation. And just like in the case of the euro, I think it's the Federal Reserve that determines the next move.

EUR/GBP Technical Analysis

The euro rallied slightly during the trading session on Monday, but it's hanging around the 50-day EMA. And I think this is an area that is going to continue to be somewhat noisy. All things being equal, I think we're just killing time here. But if we were to break down below the 0.87 level, then I think the market really starts to drop. If we rally from here and clear the 0.875 level, then I think we go looking at the 0.8850 level again. That being said, this is a very choppy market. It always is choppy. So, I'm not looking for rapid or quick moves.

Source: FX Empire