GBPUSD and EURUSD Technical analysis (13.9. 2018)

GBPUSD - Looks bullish heading into BoE Decision

The GBPUSD pair could be volatile on Thursday as the Bank of England (BoE) decides on monetary policy later in the day. Although all nine MPC members are expected to vote for rates to stay unchanged, the following commentary will be significant to traders and investors.

Bulls managed to push Sterling above the long-term bearish trend line, which signals the bearish trend has ended. As long as the cable remains above this trend line, currently around 1.2960, the short-term outlook appears neutral-to-bullish.

However, if today BoE sounds dovish, the pound could depreciate quickly to the next support zone of previous lows, at 1.29. Then, the last support level for bulls is seen at the short-term bullish trend, for now located at 1.2850.

On the upside, bullish investors are having problems breaking above the key resistance in the 1.31 zone, which has stopped the cable in its tracks twice already. Strong selling offers are most likely located here as breaking above would confirm the bullish bias, targeting the next resistance at 1.3150, where previous highs are located. July's tops are at 1.3215 and could be in play eventually, should the BoE sound hawkish today.

EURUSD - Fights for 1.1640, Awaits ECB Meeting

The single currency has failed multiple times to break above the strong resistance around the 1.1650 zone, where previous highs and lows converged. As long as the EURUSD pair trades below, the outlook looks neutral.

On the plus side for bulls, the Euro has managed to climb above the short-term bearish trend line and therefore the immediate trend is at least neutral, and not bearish.

However, expectations for today's ECB are dovish, which could send the Euro lower in the afternoon. Bulls need to defend the broken trend line, which is around the 1.16 level. If this zone cracks, the Euro will most likely drop to the key swing support of 1.1550.

Should this support (1.1550) fall as well, the bearish trend would be renewed and it looks like the pair has formed a descending triangle pattern, which is a bearish pattern, suggesting the Euro could drop around 2 figures if this pattern is confirmed.

Everything will be decided after today's ECB decision and volatility is expected to be elevated on the EURUSD pair.