Divergence between GBP and EUR

I have meant to include an entry last week. However, I really ponder on what I should discuss. 

There are a lot of callings about China's deteriorating economy. Many also calling out Disney is doomed due to DEI. We also have Malaysia just past its state election. 

I was looking at all the charts and honestly, I did not feel like starting any discussion on these.

I relook at the charts this week, and finally decided to enter a piece on EUR and GBP. My last entry on these 2 counters was EUR GBP Comparison dated 6th of May 2023. I felt that it is about time to check on their progress.

Fig 1. EUR weekly chart

In my earlier update, EUR was crossing the moving averages, and I estimated a further climb upward, strengthening against USD.

However, it continues to struggle against the 144-week moving average since then. Every new high was quickly followed by a retreat, violating the previous high. 

At the same time, the major moving averages (55, 89 and 144 weekly moving averages) maintain a bearish indication.

These are not good signs for EUR, especially a divergence indication from the MACD with lower highs and lows for every new high and low on the chart.

While it is not ready for a firm estimation of support pending more signal certainty. A rough estimate should this be the highest it can go, would be between 0.8461 to 0.9538.

What of GBP?

Fig 2. GBP weekly chart

Surprisingly GBP seems to be more resilient against USD, it continues to strengthen against USD. It in fact reached the 61.8% projection before retreating.

Considering 61.8% projection to be resistance for a correction, at the same time there is no divergence on MACD part.

I suspect it is going to hit a new high after this correction.

The only concern is the structure of the major moving averages (55, 89 and 144 week moving averages) maintain a bearish tendency.  There may still be a chance that it will head on with a bearish continuation if it breaks 1.2470.

If both cases are true, GBP and EUR may be parting ways.