Search ForexCrunch

Both EUR/USD and GBP/USD dropped to low levels and face significant challenges. What’s next for these pairs? The team at SocGen analyzes the technical levels:

Here is their view, courtesy of eFXnews:

After consolidating within a broad range since March 2015,  EUR/USD  is now breaching below the lower bound (1.0465) pointing towards the  possibility of further down move.  On the  daily chart, the pair has moved below a multi-month descending channel (at 1.0465/1.0510). Daily RSI is at a higher level as compared to November trough. However, signs of rebound are still awaited.

The descending channel at 1.0465/1.0510 will be an immediate hurdle while 1.0665 should cap near-term upside.  Very short term, the pair is likely to drift towards next projections at 1.03.  In the event of a break below 1.03, EUR/USD will face an extended correction towards multiyear down sloping channel limit at 1.0180 and more importantly 1.00.

For lots  more FX trades from major banks, sign up to eFXplus

By signing up to eFXplus via the link above, you are directly supporting  Forex Crunch.

GBP/USD  has undergone a relentless down move after breaching key graphical levels, and significant stabilization is awaited. Recent lows of 1.1752/1.1660 may provide a cushion for the time being. Short term, it faced resistance near 1.28/1.2870 and is undergoing a retracement.

Break of 1.2330 will signal deeper correction towards 1.2140/1.21.

*SocGen maintains a short GBP/USD position in its portfolio from 1.2590.