Title: EUR/USD and GBP/USD Reverse Lower After Reaching Resistance Levels
Author: Greg Michalowski, InvestingLive.com
Original Source: https://investinglive.com/technical-analysis/eurusd-and-gbpusd-rotate-back-down-to-lows-after-successful-test-of-overhead-resistance-20251008/
The EUR/USD and GBP/USD currency pairs experienced downward reversals after advancing toward key resistance levels during recent trading sessions. The pairs initially showed moderate strength but eventually failed to maintain upward momentum as sellers returned at technical zones that proved difficult to overcome.
This analysis explores the technical levels that shaped market behavior, the interaction of both pairs with resistance areas, and the broader implications for short-term and medium-term traders. Whether you’re a forex trader or market analyst, understanding these movements is vital to anticipating possibilities in upcoming sessions.
EUR/USD: Resistance Held, Triggering Downturn
The EUR/USD failed to sustain its upward movement following a test of a critical resistance area defined by multiple technical indicators. With a successful rejection from this overhead zone, bears resurfaced and drove the market lower.
Key Observations on EUR/USD:
– The pair had rallied into resistance near the 100-hour moving average (MA).
– Sellers entered as the pair approached the 100-hour MA at 1.0599, preventing an extended move higher.
– A swing area near 1.05918 also added to the resistance cluster, reinforcing the rejection.
Technical Details:
– The high price during the move was 1.0598, nearing the 100-hour MA but not surpassing it.
– A significant retracement occurred after the failed breakout, dragging the pair down toward earlier session lows.
– The swing area mentioned previously has historical significance and played a role in producing selling pressure.
Implications:
Traders watching for momentum higher were disappointed as the inability to break resistance levels preserved the existing bearish bias. The re-emergence of sellers highlights that bullish sentiment lacks commitment, at least until prices can close above critical resistance levels such as the 100-hour moving average.
Support and Next Levels to Watch:
– Immediate support lies at the session low near 1.0537.
– Breaking below that level could prompt further downside movement.
– Longer-term support could come near 1.0500, which has previously served as a consolidation zone.
This failed resistance break aligns with a broader downtrend seen over several sessions, reinforcing a sell-the-rally strategy among short-term traders.
GBP/USD Mirrors EUR/USD Behavior with Resistance Rejection
Much like the EUR/USD, the GBP/USD currency pair experienced a rotation back to the downside after failing to breach a key resistance zone. The pair had moved higher initially but met firm technical resistance that halted bullish progress.
Key Observations on GBP/USD:
– The pair rose close to the 100-hour moving average located near 1.2206.
– The high reached during the move was near 1.2200, but the price failed to maintain footing at those levels.
– Sellers appeared soon after, pushing the pair steadily lower into the New York session.
On a technical front, the pair also faced resistance from a swing area on the chart, providing an added obstacle for any attempted rally.
Important Technical Zones:
– Resistance: 1.2200 psychological level and the 100-hour MA at 1.2206.
– Support: The low from earlier trading near 1.2137 and additional swing areas slightly below that threshold.
The failed test above the 100-hour MA served as a signal for sellers to take control, capitalizing on the weak bullish follow-through.
Broader GBP/USD Analysis:
– The overall trend remains bearish with no major change in structure.
– The inability of bulls to clear resistance continues a pattern of lower highs and lower lows.
– Any meaningful upside would likely require a daily close above the 1.2206 level to shift momentum.
Market Sentiment and Broader Outlook
Both pairs remain under pressure despite temporary rallies
Read more on EUR/USD trading.