EUR/GBP Technical Analysis: Topping Below 0.76 Figure?

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Talking Points:

• EUR/GBP Technical Strategy: Flat
• Euro Resumes Advance, Issues Strongest Close in 11 Months vs. British Pound
• Negative RSI Divergence Hints at Ebbing Upside Momentum, Warns of Pullback

The Euro resumed its advance against the British Pound, building on a break of double-top resistance to issue the strongest daily close in 11 months. The early emergence of negative RSI divergence hints upside momentum may be fading however, warning of a possible pullback in the works.

Near-term resistance is at 0.7578, the 23.6% Fibonacci expansion, with a break above that on a daily closing basis opening the door for a challenge of the 38.2% level at 0.7662. Alternatively, a reversal below the 14.6% Fib at 0.7526 paves the way for a retest of double top resistance-turned-support at 0.7461.

An actionable trade setup is absent at this point. However, our fundamental outlook argues for continuation of the dominant multi-year down trend.Assuch, we will remain flat and wait for an attractive selling opportunity to present itself before taking on a trade.

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