EUR/GBP Technical Analysis: Euro Rallies Most in 7 Weeks
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- EUR/GBP Technical Strategy: Short at 0.7325
- Euro Soars Against the British Pound, Produces Largest Daily Advance in Seven Weeks
- Short Trade Held as Trend Line Holds, Hinting Downward Bias Remains Intact for Now
The Euro surged upward against the British Pound, with prices producing the largest single day advance in seven weeks. The UK unit faced broad-based selling pressure following the Bank of England monetary policy announcement.
From here, a daily close above the 23.6% Fibonacci retracement at 0.7148 opens the door for a test of the 38.2% level at 0.7214. Alternatively, a move back below the 14.6% Fib at 0.7107 – now acting as support – clears the way for a challenge of the November 5 low at 0.7042.
We entered short EUR/GBP at 0.7325 and subsequently took profit on half of the position. Thus far, the push higher failed to break trend resistance. With that in mind, the second half of the short position will remain open with a stop-loss at the breakeven level until the near-term down move has been conclusively invalidated.
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