Resistance in EURUSD, GBPUSD breaking, EURGBP support
There are a lot of balls in the air with regard to the EURUSD, the GBPUSD and also the EURGBP. Which straw is stirring the drink? Let's take a look.
First the EURUSD...
The EURUSD pushed up to the topside trend line outlined in an earlier post (CLICK HERE) and stalled. The price moved back down toward the 1.1240 area off the resistance. Sellers (either profit takers or new trading shorts) have good trade location against that level.
The GBPUSD...
The GBPUSD moved above the Monday high and trend line resistance at the 1.3091 and 1.3097 level (for trend line). There is a cluster of resistance at the 1.3134-41 area. The correction off the first move higher just tested that broken trend line. We are trading near highs again with the cluster resistance the target still. In between key support and key resistance.
The EURGBP....
The EURGBP moved above a Bullish above/bearish below area earlier this week at the 0.8574-82. We are testing that area now after spending most of the last few days above. Admittedly, the break higher has been somewhat contained. This is a key test therefore to see if the buyers can keep control.
Is it the EURGBP which will cast the deciding vote? If the EURGBP moves- and stays below the 0.8574 level - that should give the GBPUSD a push toward the cluster resistance. If it holds, I don't think we can get there and GBPUSD comes back down (may move back below the support).
If the EURGBP goes lower the shorts from the trend line in the EURUSD should benefit too. If not (i.e. the EURGBP goes higher), the EURUSD may head back to test that trend line above.....
A third alternative might be that the EURGBP stalls right here and the dollar drives the EURUSD and the GBPUSD.
Lots of balls in the air. Key technical levels being tested and key targets eyed.....All of which makes for interesting combinations that should be of influence for your trading.....
