GBP/USD Head & Shoulders, EUR/GBP Support Zone in Focus

British Pound, GBP/USD, EUR/GBP – Tech Update:

• british pound Focus on future key support levels
• GBP/USD Bearish Head & Shoulders Still Remains
• euro/pound Recent dips focus on key range

As the new week begins, the British pound remains vulnerable against the US dollar. In the daily chart below, we can see GBP/USD trading above the neckline of the bearish Head & Shoulders chart formation around 1.2648. In the short term, the key will be how price dynamics evolve. A confirmed breakout could further strengthen the bearish technical bias.

That could put the focus on the 200-day moving average (MA) and return the focus to the broader upside. Otherwise, the price could revisit the May lows of 1.2308. Otherwise, a high turn will focus on the main resistance around 1.2848. Beyond that, we reach an inflection point of 1.3, set in March 2022.

Charts created with TradingView

The British pound, on the other hand, remains fairly neutral against the euro. On the daily chart below, EUR/GBP has been holding value between major support and resistance zones since June.

Resistance is in the range of 0.8658-0.8701, with support around 0.8493-0.8519. Last week, the exchange rate found new resistance around 0.8610 before turning downwards. As such, the focus is on the support range where the price holds and may rise again.

Such a result will bring more attention to the 100-day moving average, which was repeated multiple times in July and August. That could return the focus to the downside.

Charts created with TradingView

— By Daniel Dubrowski, Senior Strategist, DailyFX.com