EUR/GBP Technical Analysis: Down Trend Seeks Momentum
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- EUR/GBP Technical Strategy: Short at 0.7325
- Euro Declines for Third Consecutive Day After Failing to Break Trend Line Resistance
- Short Trade Still Active with Stop at Breakeven, Looking for Down Trend Continuation
The Euro finds itself under pressure once again after a surge against the British Pound following the BOE policy announcement failed to break trend line resistance. Prices have now declined for three consecutive days, making for the longest losing streak in a month, though momentum is far from convincing as ATR-based volatility drops to the lowest since April.
Near-term support is at 0.70941, the 23.6% Fibonacci expansion, with a break below that opening the door for a test of the 0.7025-42 area marked by the November 5 low and the 38.2% level. Alternatively, breaking above the 14.6% level at 0.7131 – a move that would likewise clear trend line resistance set from mid-October highs – clears the way for a challenge of the 38.2% Fib retracement at 0.7214.
We sold EUR/GBP at 0.7325 and thenbooked profit on half of the trade. The remainder of the position remains in play to capture continued downside momentum. The stop-loss has been revised to the breakeven level.
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