Market Analysis: GBP/USD Recovers While EUR/GBP Dives Below Support

<img src="https://fxopen.com/blog/en/content/images/2024/01/gbp-usd-2.jpg" alt="Market Analysis: GBP/USD Recovers While EUR/GBP Dives Below Support" /><p><em>GBP/USD is attempting a recovery wave above the 1.2690 resistance. EUR/GBP declined steadily below the 0.8585 and 0.8570 support levels.</em></p><h2>Important Takeaways for GBP/USD and EUR/GBP Analysis Today</h2><p>· The British Pound is attempting a fresh increase above 1.2650.</p><p>· There is a key contracting triangle forming with support near 1.2690 on the hourly chart of GBP/USD at FXOpen.</p><p>· EUR/GBP is trading in a bearish zone below the 0.8585 pivot level.</p><p>· There is a connecting bearish trend line forming with resistance near 0.8570 on the hourly chart at FXOpen.</p><h2>GBP/USD Technical Analysis</h2><p>On the hourly chart of GBP/USD at FXOpen, the pair declined after it failed to clear the 1.2800 resistance. As mentioned in the <a href="https://fxopen.com/blog/en/aj-market-analysis-gbp-usd-retreats-from-highs-usd-cad-grinds-higher/">previous analysis</a>, the British Pound even traded below the 1.2715 support against the US Dollar.</p><p>Finally, the pair tested the 1.2600 zone and is currently attempting a fresh increase. The bulls were able to push the pair above the 50-hour simple moving average and 1.2740. The pair even climbed above the 50% Fib retracement level of the downward move from the 1.2785 swing high to the 1.2596 low.</p><figure><img src="https://fxopen.com/blog/en/content/images/2024/01/gbpusd.png" alt="Market Analysis: GBP/USD Recovers While EUR/GBP Dives Below Support" loading="lazy" width="2000" height="1099" srcset="https://fxopen.com/blog/en/content/images/size/w600/2024/01/gbpusd.png 600w, https://fxopen.com/blog/en/content/images/size/w1000/2024/01/gbpusd.png 1000w, https://fxopen.com/blog/en/content/images/size/w1600/2024/01/gbpusd.png 1600w, https://fxopen.com/blog/en/content/images/size/w2400/2024/01/gbpusd.png 2400w" sizes="(min-width: 720px) 720px" /></figure><p>On the upside, the GBP/USD chart indicates that the pair is facing resistance near 1.2715. It coincides with the 61.8% Fib retracement level of the downward move from the 1.2785 swing high to the 1.2596 low.</p><p>The next major resistance is near 1.27640. A close above the 1.2740 resistance zone could open the doors for a move toward 1.2790. Any more gains might send GBP/USD toward 1.2840.</p><p>On the downside, there is a key support forming near a contracting triangle at 1.2690. If there is a downside break below 1.2690, the pair could accelerate lower. The first major support is near the 1.2640 level.</p><p>The next key support is seen near 1.2600, below which the pair could test 1.2550. Any more losses could lead the pair toward the 1.2500 support.</p><h2>EUR/GBP Technical Analysis</h2><p>On the hourly chart of EUR/GBP at FXOpen, the pair started a major decline from well above 0.8600. The Euro traded below the 0.8585 and 0.8575 support levels against the British Pound.</p><p>The EUR/GBP chart suggests that the pair even declined below the 0.8570 level and tested 0.8555. It is now consolidating losses and trading below the 50-hour simple moving average. The pair is now facing resistance near a connecting bearish trend line at 0.8570.</p><figure><img src="https://fxopen.com/blog/en/content/images/2024/01/eurgbp.png" alt="Market Analysis: GBP/USD Recovers While EUR/GBP Dives Below Support" loading="lazy" width="2000" height="1099" srcset="https://fxopen.com/blog/en/content/images/size/w600/2024/01/eurgbp.png 600w, https://fxopen.com/blog/en/content/images/size/w1000/2024/01/eurgbp.png 1000w, https://fxopen.com/blog/en/content/images/size/w1600/2024/01/eurgbp.png 1600w, https://fxopen.com/blog/en/content/images/size/w2400/2024/01/eurgbp.png 2400w" sizes="(min-width: 720px) 720px" /></figure><p>It is close to the 23.6% Fib retracement level of the downward move from the 0.8618 swing high to the 0.8554 low. The next major resistance could be 0.8575 and the 50-hour simple moving average.</p><p>The main resistance is near the 50% Fib retracement level of the downward move from the 0.8618 swing high to the 0.8554 low at 0.8585. A close above the 0.8585 level might accelerate gains. In the stated case, the bulls may perhaps aim for a test of 0.8620. Any more gains might send the pair toward the 0.8650 level.</p><p>Immediate support sits near 0.8555. The next major support is near 0.8540. A downside break below the 0.8540 support might call for more downsides. In the stated case, the pair could drop toward the 0.8500 support level.</p>