EUR/GBP Technical Analysis: Euro Gains Most in 13 Months
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- EUR/GBP Technical Strategy: Flat
- Euro issues strongest close in 13 months vs. British Pound, sets new 2016 high
- Waiting for selling opportunity in line with dominant multi-year down trend
The Euro looks poised to continue higher against the British Pound after prices issued the strongest daily close in 13 months and set a new 2016 high. The long-term trend established from late 2008 continues to favor a downside bias however.
Near-term resistance is at 0.7821, the 38.2% Fibonacci expansion, with a break above that on a daily closing basis opening the door for a test of the 50% level at 0.7913. Alternatively, a move back below the 23.6% Fib at 0.7708 paves the way for a challenge of the January 22 low at 0.7526.
Our 2016 fundamental outlook favors the resumption of the multi-year EUR/GBP down trend after the current upswing runs its course. With that in mind, we will remain on the sidelines for now and wait for signs of bearish reversal to position for a short trade.
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