EUR/USD and GBP/USD come off their five-month highs
Outlook on EUR/USD and GBP/USD as traders square their books ahead of year-end.
EUR/USD comes off five-month high
EUR/USD managed to rise to $1.1139, close to its 27 July high at $1.1149, before reversing lower amid an appreciating US dollar on short-covering into year-end.
The fall through the accelerated December uptrend line at $1.1070 puts the November peak at $1.1017 and the mid-December high at $1.1009 potentially back on the cards. This support area is likely to hold into year-end, though.
Above Friday’s intraday high at $1.1084 sits Wednesday’s $1.1122 high ahead of Thursday’s $1.1139 five-month high.
GBP/USD loses upside momentum into year-end
GBP/USD briefly made a new five-month high at $1.2828 on Thursday before giving back some of its gains as traders bought back their short US dollar positions.
Since negative divergence accompanied the daily Relative Strength Index (RSI), a possible top may be formed in the first week of 2024 which could take the currency pair through its November-to-December uptrend line at $1.2650. First, though, a fall through Thursday’s low at $1.2713 would need to occur.
Resistance remains to be seen at last week’s high at $1.2762 above which sits the more significant $1.2794 to $1.2828 resistance area which consists of the 10 August high at $1.2819 and the recent December peaks.
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