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EURGBP: Bearish Bias Remains Intact Despite Rebound

EURGBP: Bearish Bias Remains Intact Despite Rebound

Nick Cawley, Senior Strategist

The Brand New DailyFX Q12019 EURand GBP Forecast s arenow available to download.

EURGBP Outlook Remains Negative Under 0.8803

EURGBP touched a 20-month low last week – just – before bouncing back out of oversold territory. The chart set-up remains pointed to the downside after the break lower and further losses cannot be counted out. On the longer-dated chart the next level of support appears at 0.8655, the broken November swing-low before a move lower all the way down to 0.8385 (May 2017 swing-low), a sharp fall from current levels.

On the upside the recent move higher has seen the gap on the January 23 candle nearly filled. The gap, between the Jan 23 low at 0.8760 and the January 24 high at 0.8725, needs to be filled to allow the price to weaken further. Above here is the important 61.8% Fibonacci retracement level at 0.8803, which should provide stiffer short-term resistance ahead of the 20-day moving average at 0.88170. If the pair break and close above here the negative bias is erased, and we would wait for further entry points.

EURGBP Daily Price Chart (March 2018 – January 30, 2018)

IG Client Sentiment Data shows how retail investors are positioned in a range of currencies and asset markets.

Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

What is your view on EURGBP – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author at nicholas.cawley@ig.com or via Twitter @nickcawley1.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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