Sample Category Title

On the hourly chart of AUD/USD at FXOpen, the pair started a fresh increase above the 0.6830 resistance. The Aussie Dollar traded above the 0.6860 resistance before the bears appeared.

The pair tested the 0.6900 zone before there was a bearish reaction. There was a break below a key bullish trend line at 0.6860 and the 50-hour simple moving average. The pair traded close to the 0.6830 support and is currently attempting another increase.

The first key resistance is near 0.6860. If there is an upside break above the 0.6860 zone, the pair could rise steadily toward the 0.6900 level. Any more gains might send AUD/USD toward 0.6950.

On the downside, there is a decent support near the 0.6830 level, below which the pair might test the 0.6780 support. Any more losses might send the pair toward the 0.6740 support.

GBP/USD rallied above the 1.2765 and 1.2800 resistance levels. EUR/GBP declined and now trading below the 0.8565 resistance.

Important Takeaways for GBP/USD and EUR/GBP Analysis Today

• The British Pound is trading in a bullish zone above 1.2700 against the US Dollar.
• There is a key bullish trend line forming with support near 1.2765 on the hourly chart of GBP/USD at FXOpen.
• EUR/GBP started a fresh decline from the 0.8590 resistance zone.
• There is a major bearish trend line forming with resistance near 0.8540 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair started a major increase from the 1.2500 support zone. The British Pound climbed above the 1.2625 resistance zone against the US Dollar.

The bulls were able to pump the pair above 1.2765 and the 50-hour simple moving average. Finally, the pair climbed above 1.2800 and tested 1.2845. A high is formed near 1.2847 and the pair is now consolidating gains.

It is trading above the 23.6% Fib retracement level of the upward move from the 1.2629 swing low to the 1.2847 high. The GBP/USD chart indicates that the pair is facing resistance near the 1.2845 level.

The next major resistance is near the 1.2880 level. If the RSI moves above 60 and the pair climbs above 1.2880, there could be another rally. In the stated case, the pair could rise toward the 1.2950 level or even 1.3000.

On the downside, there is a major support forming near a trend line at 1.2765 and the 50-hour simple moving average. If there is a downside break below the 1.2765 support, the pair could accelerate lower.

The next major support is near the 61.8% Fib retracement level of the upward move from the 1.2629 swing low to the 1.2847 high or 1.2700, below which the pair could test 1.2625. Any more losses could lead the pair toward the 1.2500 support.

EUR/GBP Technical Analysis

On the hourly chart of EUR/GBP at FXOpen, the pair started a fresh decline from the 0.8590 resistance. The Euro traded below the 0.8565 support to move into a bearish zone against the British Pound.

The EUR/GBP chart suggests that the pair settled below the 50-hour simple moving average and 0.8540. A low is formed near 0.8522 and the pair is now showing a few bearish signs. The RSI is moving lower toward the 35 level.

Immediate resistance is near a major bearish trend line at 0.8540. It coincides with the 23.6% Fib retracement level of the downward move from the 0.8591 swing high to the 0.8522 low.

The next major resistance for the bulls is near the 61.8% Fib retracement level of the downward move from the 0.8591 swing high to the 0.8522 low at 0.8565. A close above the 0.8565 level might accelerate gains.

In the stated case, the bulls may perhaps aim for a test of 0.8590. Any more gains might send the pair toward the 0.8650 level.

If there is no move above 0.8540, the pair could continue to move down. Immediate support sits at 0.8520. The next major support is near 0.8500.

A downside break below the 0.8500 support might call for more downsides. In the stated case, the pair could drop toward the 0.8440 support level.

Market picture

The crypto market capitalisation rose 1.5% last week to reach $1.066 trillion at the start of the new week. But it wasn’t a smooth ride, as Bitcoin gained 2% last week to end the week down 4% at around $26,500. Ethereum lost 1% to $1730. Other leading altcoins in the top 10 fell between 0.4% (TRON) and 6.4% (XRP). The exception was BNB (+2.6%).

Thanks largely to positive equity market traction, bitcoin found support on the downside below $25,000 and formally closed above its 200-week average. The market was near the upper end of the downside range on the smaller timeframes. Given the overbought equity market, more downside risks could push BTCUSD lower, leaving it within the bearish trend. Only a rally above $27.2K – the area of previous local highs and the 50-day moving average – can effectively break this trend.

According to Bloomberg, Bitcoin’s share of the total market value of all cryptocurrencies has reached its highest level since mid-autumn 2021. Traders are more likely to keep their money away from altcoins.

News background

Digital asset platform Bakkt has announced that it is removing Solana, Polygon and Cardano cryptocurrencies from its available assets until regulatory uncertainty is resolved.

US financial giants BlackRock, Bank of America and Fidelity are increasing their investment in MicroStrategy shares, with more than $200 million invested. MicroStrategy holds more than 140,000 BTCs.

The Securities and Exchange Commission (SEC) agreed with the Binance exchange to restrict employees of the parent platform from accessing the assets of Binance.US customers.

French authorities have opened an investigation into the Binance exchange, Le Monde reported, citing the Paris prosecutor’s office. The authorities suspect the exchange of money laundering, failure to comply with KYC procedures and other violations of French law.

Tesla CEO Elon Musk denies insider trading in the Dogecoin cryptocurrency. He says he does not own the cryptocurrency wallets allegedly used for DOGE transactions.

• EUR/GBP has continued to trade lower, now at 0.8520, its lowest level since Aug 2022 ahead of UK inflation data (Wed,21 Jun) & BoE monetary policy decision (Thurs, 22 Jun).
• Short-term downtrend for EUR/GBP remains intact since the 26 Apr high of 0.8875.
• Key short-term resistance to watch will be at 0.8580 to maintain bearish momentum.

Last week, the EUR/GBP cross rate recorded its third consecutive weekly loss and traded below its former medium-term range support of 0.8580 (swing low areas of October/December 2022) which was broken down in the week of 5 June 2023. At this time of writing, the EUR/GBP has continued to trade on a bearish bias at 0.8520, its lowest level since August 2022.

From a news flow/economic data and events standpoint, we have two key data/events this week for the UK; the inflation data for May out on Wednesday, 21 June, and the Bank of England’s (BoE)’s monetary policy decision on Thursday, 22 June.

The expectation of further rate hikes from BoE is being priced in the interest rate futures market where participants expect a 25 basis points (bps) hike this Thursday to bring the policy bank rate to 4.75%, follow by a potential series of five further rate hikes next of 25 bps each to reach a terminal rate of 6%. That’s a more hawkish stance than ECB if such a trajectory of hikes from the BoE turns out as expected.

Fig 1: EUR/GBP long-term & major trends as of 19 Jun 2023 (Source: TradingView, click to enlarge chart)

Fig 2: EUR/GBP minor short-term trend as of 19 Jun 2023 (Source: TradingView, click to enlarge chart)

The long-term secular trend remains sideways

Since Aug 2017 major swing high, the EUR/GBP is trapped within a major sideway range configuration with its key resistance and support at 0.9300 and 0.8300 respectively (see monthly chart).

The short-term downtrend remains intact

Price actions of the EUR/GBP have continued to evolve with a short-term descending channel in place since its 26 April 2023 high of 0.8875 as well as remained below its downward sloping 20-day moving average since 3 May 2023 (see 4-hour chart).

Momentum remains bearish in the short-term

The 4-hour RSI oscillator has broken below its corresponding ascending support at the 41% level last Friday, 16 June, and has yet to reach an extremely oversold level of 23.90% that was last seen on 1 May 2023.

Key short-term pivotal resistance will be at 0.8580 which is also defined by the upper boundary of the short-term descending channel with near-term supports coming in at 0.8460 and 0.8410 (24 August 2022 low, lower boundary of the short-term descending channel & a Fibonacci retracement/extension cluster).

On the flip side, a clearance above 0.8580 damages the short-term downtrend to expose the next resistance at 0.8670 (former minor range support of 10 May/25 May 2023).

• ECB’s Nagel says tightening could continue after July
• US inflation expectations fall to lowest level since March 2021

The euro has started the week quietly. EUR/USD is trading at 1.0917, down 0.22%. There is a bank holiday in the US and no eurozone releases on the calendar, which should mean a calm day for the euro.

ECB signals that rate tightening to continue

The ECB raised rates by 0.25% last week, bringing the benchmark rate to 3.50%. The central bank was late to the tightening party, after dismissing rising inflation as transient. Those days are long gone, and the ECB’s aggressive tightening campaign has pushed the benchmark rate to a 22-year high.

The rate hike last week was expected, but that didn’t prevent the euro from having a massive Thursday, gaining 1.05%. The euro received a boost from ECB President Lagarde’s press conference, when she said it would take a “material change” for the ECB not to raise rates in July. On Friday, some of the ECB hawks stated that more rates hikes could be needed after July, including Bundesbank President Nagel, who said a September hike might be needed.

In response, the markets have revised upwards the pricing of a July hike to 72% and a September hike to 54%. Lagarde has been tight-lipped about what the ECB has planned after July, but clearly there is some support within the ECB for further hikes after that.

In the US, UoM inflation expectations fell sharply to 3.3% in June, down from 4.2% in May and lower than the 4.1% consensus. This was the lowest level since March 2021 and is another indication that inflation is heading lower. The UoM Consumer Sentiment survey rose from 59.2 to 63.9, boosted by the drop in inflation expectations as well as the resolution of the banking crisis, according to the survey.

EUR/USD Technical

• There is resistance at 1.0976 and 1.1031
• 1.0882 and 1.0805 are providing support

ECB Governing Council member Peter Kazimir stressed today the necessity for continued monetary policy tightening to address prevailing inflationary pressures. he specifically highlighted the need for another rate hike in July to move further into a restrictive policy stance.

"We need to deliver another rate hike in July and move further into restrictive territory," Kazimir stated. He underscored that a continuation of monetary policy tightening is "the only reasonable way ahead."

Looking ahead to September, Kazimir cautioned that an updated analysis would be required to assess the impact of ECB's rate hike cycle before proceeding with further tightening measures. However, he emphasized that halting rate hikes prematurely presents a "much more significant" risk than overtightening.

Kazimir drew attention to several factors contributing to inflation risks, asserting, "Upward inflation risks are still substantial, linked to the labour market situation, food prices and, last but not least, profit margins."

EURUSD had been experiencing a downside correction after peaking at the 13-month high of 1.1094. However, the pair has been regaining ground since it found its feet at the May low of 1.0633, crossing above its 50-day simple moving average (SMA) before its rebound stalled at the upper end of the Ichimoku cloud.

The momentum indicators currently suggest that near-term risks are tilted to the upside. Specifically, the RSI has flatlined above its 50-neutral mark, while the MACD histogram jumped above zero and its red signal line to its highest level since May 23.

If the positive momentum intensifies further, the February peak of 1.1032 could prove to be the first obstacle for buyers to clear. Surpassing that zone, the price could advance towards the 13-month high of 1.1094. A violation of that zone could send the price towards levels not seen in months, where the March 2022 high of 1.1184 might curb its upside.

Alternatively, should the price reverse downwards, initial support could be found at the 50-day SMA, currently at 1.0880. A dive beneath that region could turn the spotlight to 1.0790 before the May low of 1.0633 comes under examination. Failing to halt there, the pair could challenge the March double-bottom region of 1.0515.

In brief, EURUSD’s latest attempt for recovery has faltered after hitting the upper boundary of the Ichimoku cloud, but bullish forces have not surrendered yet. Therefore, the pair could enter a consolidation phase before buyers retry pushing the price higher.

The Euro edged lower in early Monday, adding downside risk after Friday’s long-legged Doji signaled strong indecision.

Last week’s rally (nearly 1.8% up for the week) accelerated strongly on Thursday on hawkish ECB but faced strong headwinds on approach to the top of thick daily cloud (1.0964).

Traders are likely to collect some profits after recent strong acceleration higher for price adjustment ahead of fresh push higher, as overall sentiment remains positive and completion of reversal pattern on weekly chart adds to bullish signals.

Fading bullish momentum on daily chart and overbought stochastic, contribute to reversal signals, although the pullback is likely to be limited, with solid supports at 1.0891/81 (Fibo 23.6% of 1.0635/1.0970 / 55DMA), guarding pivot at 1.0842 (Fibo 38.2% retracement) which should contain extended dips and keep larger bulls in play.

Res: 1.0964; 1.0983; 1.1000; 1.1053.
Sup: 1.0917; 1.0881; 1.0842; 1.0811.

Daily Pivots: (S1) 179.76; (P) 180.90; (R1) 182.97; More...

Intraday bias in GBP/JPY stays on the upside at this point. Current up trend should target 138.2% projection of 148.93 to 172.11 from 155.33 at 187.36. On the downside, below 178.80 minor support will turn intraday bias neutral and bring consolidations first, before staging another rally.

In the bigger picture, up trend from 123.94 (2020 low) is extending. Next target is 195.86 (2015 high). For now, medium term outlook will remain bullish as long as 172.11 resistance turned support holds, even in case of deep pull back.

Daily Pivots: (S1) 153.76; (P) 154.52; (R1) 155.94; More....

Intraday bias in EUR/JPY stays on the upside as up trend is in progress. Next target is 100% projection of 139.05 to 151.60 from 146.12 at 158.67. On the downside, below 153.08 minor support will turn intraday bias neutral and bring consolidations first, before staging another rally.

In the bigger picture, rise from 114.42 (2020 low) is in progress. Next target is 100% projection of 124.37 to 148.38 from 138.81 at 162.82. For now, medium term outlook will remain bullish as long as 148.38 resistance turned support holds, even in case of deep pull back.