British Pound Technical Analysis - GBP/USD, EUR/GBP

• GBP/USD bounced back from attempting to make a new low for the year

• EUR/GBP ran out steam on the move up as momentum is now mixed

• Will Sterling continue to be undermined and make fresh lows？

GBP/USD TECHNICAL ANALYSIS

GBP/USD moved aggressively lower last week, breaking below previous lows of 1.3569 and 1.3544. These levels may offer pivot point resistance.

The move also went below the lower band of the 21-day simple moving average (SMA) based Bollinger Band. A close back inside the lower band could suggest that bearishness is pausing.

The low of 1.3425 last week did not breach the low for the year at 1.3412. It might provide support if tested again.

In making that low, the price has remained below all short, medium and long term SMAs. A bearish triple moving average (TMA) formation requires the price to be below the short term SMA, the latter to be below the medium term SMA and the medium term SMA to be below the long term SMA. All SMAs also need to have a negative gradient.

GBP/USD is below the 10-day SMA, which is below the 55-day SMA, which is below the 100-day SMA. All SMAs have a negative gradient. This might suggest bearish momentum could still evolve. A move back above the 10-day SMA would negate the TMA formation.

Further potential resistance may be at the pivot point at 1.3710 and the previous highs of 1.3835, 1.3913 and 1.3982.

EUR/GBP TECHNICAL ANALYSIS

EUR/GBP appreciated sharply last week and broke above a previous high at 0.85184 that could now be a pivot point support level. Near there is the 55-day SMA that might provide support, currently at 0.85265.

Below that, there is possible support at the previous lows of 0.84630 and 0.84029.

The move up failed to hold above the 200-day SMA, and it may continue to offer resistance. It is currently at 0.85830. Above that, there are a series of previous highs that are potential resistance levels at 0.86583, 0.86697 and 0.86716.

EUR/GBP currently sits above the 10-day and 55-day SMAs but below the 200-day SMA. This might indicate that short and medium term momentum could be bullish but that longer term momentum is not.

Source: DailyFX