EUR/USD and GBP/USD Price Analysis: Restrained U.S. Dollar Allows Peers to Fly
- EUR/USD bulls breakdown near-term resistance at 1.1410-20.
- GBP/USD formed a bullish pin bar, leading to big gains of over 130 pips. Next upside target for bulls up at 1.2850.
The price was very much elevated during trading at the start of the week, on Monday. This was largely thanks to weakness in the USD, which is seen across the board. Firstly, looking at the 1-hour chart view, EUR/USD bulls managed to breakdown troublesome near-term resistance. The supply was parked around 1.1410-20 region, where several rejections were seen from 3rd January up untill Monday. The breach above this area allowed for some decent buying pressure to come into play. EUR/USD printed a high in the session up at 1.1482.
Elsewhere, as for the daily chart view, the price has moved into a known long-term area of supply. This can be seen heading into the 1.1500 territory. EUR/USD faced countless rejections here, attempting to break above. It has not traded within the 1.1500 price region since October 2018. Given the proven strength of sellers in this area, odds are stacked in favour of the bears.
Similar to EUR/USD, the British pound is elevated versus the greenback, as GBP/USD traded up at its highest level seen since 31st December 2018. It has been a very volatile past few trading days, even when observing the daily time frame. Price action was initially confined within a rising wedge pattern formation, which saw the bears force their way out of on 2nd January. The following session on 3rd January, the market was hit with the mini ‘flash crash’, which can be seen via the daily candlestick. GBP/USD managed to quickly retrace that freakish spike to the downside, still closing in positive territory.
A bullish pin bar candlestick had formed, on the back of that sharp move south that rippled across the markets. Since, GBP/USD bulls have further capitalized, gaining over 130 pips at the time of writing. Given the most recent surge higher, the price has smashed back through and trading again within the rising wedge pattern. Next upside resistance is not likely going to be seen until 1.2850, where the upper trend line of the wedge is observed.
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