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EUR/GBP Technical Analysis: Trading Sideways Ahead of BOE

EUR/GBP Technical Analysis: Trading Sideways Ahead of BOE

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Talking Points:

The Euro remains locked in a narrow consolidation range above the 0.72 figure against the British Pound, with the outlines of a descending Triangle pattern hinting at a downside bias.Confirmation of the bearish scenario requires a clear-cut break through Triangle support on a daily closing basis.

A move below the January 22 low at 0.7526 opens the door for a test of the 38.2% Fibonacci retracement at 0.7460. Alternatively, a push above Triangle resistance exposes the 23.6% Fib expansion at 0.7708, followed by the 38.2% threshold at 0.7821.

An actionable EUR/GBP trade setup is absent for the time being. The longer-term trend favors the downside but entering short here seems ill-advised as high-impact event risk by way of the BOE monetary policy announcement threatens to unravel technical positioning. With that in mind, we will wait on the sidelines for a more attractive opportunity to present itself.

Is the Euro behaving as DailyFX analysts expected? See our quarterly forecast to find out!

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