Market update: GBP/USD, EUR/GBP show that sterling remains pressured

[MongiIG]

The British pound has continued to lose ground; GBP/USD 200-day MA breakout in focus as EUR/GBP pushes towards key resistance.

 

Source: Bloomberg

 

Pound sterling GBP/USD EUR/GBP United States dollar Euro Forex

Daniel Dubrovsky | Currency Analyst, DailyFX, San Francisco | Publication date: Tuesday 19 September 2023 07:57

Sterling takes a pounding

The British pound may be readying to extend its losing streak against the US dollar. For context, GBP/USD has been aiming lower since breaking under a bearish Head & Shoulders chart formation, opening the door to an increasingly downward technical bias. Now, prices have confirmed a breakout under the 200-day moving average (MA).

That is further underscoring the bearish GBP/USD view, placing the focus on immediate support which is now the May low of 1.2308. This will likely be the next key test. Pushing lower underscores, the near-term bearish bias. Otherwise, a turn higher places the focus back on the neckline of the Head & Shoulders, which is around 1.2592.

GBP/USD daily chart

 

Source: TradingView

Pound also loses ground to euro

Meanwhile, the British pound is also losing ground to the euro. On the daily chart below, EUR/GBP is attempting to confirm a breakout above the 0.861 inflection point and the 100-day moving average. While this could open the door to a stronger bullish technical bias for the exchange rate, the broader horizon remains neutral.

EUR/GBP remains in a consolidative setting between resistance (0.8658 – 0.8701) and support (0.8493 – 0.8519). Recent progress does open the door to revisiting the former, as well as the broader falling trendline from February. These could hold as resistance. As such, there is more work for EUR/GBP to do before shifting to a stronger bullish technical bias.

EUR/GBP daily chart

 

Source: TradingView

 

 

This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.