EUR/GBP Technical Analysis: Euro Rally May Be Fizzling
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- EUR/GBP Technical Strategy: Flat
- Euro rally may be fizzling after prices hit 14-month high vs. British Pound
- Looking for actionable short trade signal to sell in line with long-term trend
The Euro spiked to the highest level in 14 months against the British Pound but the push higher stumbled ahead of the 0.79 figure. The emergence of negative RSI divergence now hints at ebbing upside momentum and warns that a downturn may be ahead.
A daily close above the 38.2% Fibonacci expansion at 0.7821 clears the way for a challenge of the 50% threshold at 0.7913. Alternatively, below the 0.7681-0.7708 area (23.6% Fib retracement and expansion levels) opens the door for a test of the 0.7526-47 zone (January 22 low, 38.2% retracement).
The dominant multi-year EUR/GBP trend favors the downside and our 2016 fundamental outlook expects this to continue. As such, we are looking to enter short, but an actionable reversal needed to confirm entry on a trade is absent for now. We will wait and remain flat.
Has the Euro behaved in line with DailyFX expectations? Find out here!
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