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EUR/GBP Technical Analysis: Euro Moves to 3-Year High

EUR/GBP Technical Analysis: Euro Moves to 3-Year High

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Talking Points:

  • EUR/GBP Technical Strategy: Flat
  • Euro hits 3-year high vs. British Pound in “Brexit” referendum aftermath
  • Risk/reward setup, technical positioning argue against taking trade for now

The Euro continues to push upward against the British Pound having produced the largest daily advance on record following the UK “Brexit” referendum. Prices have now advanced to levels unseen since August 2013 as buyers challenge the 0.86 figure.

A daily close above the 50% Fibonacci expansion at 0.8596 opens the door for a test of the 61.8% level at 0.8689. Alternatively, a reversal back below the 38.2% Fib at 0.8504 sees the next downside threshold at 0.8390, the 23.6% expansion.

An actionable trading opportunity appears absent for now. On one hand, prices are too close to resistance to justify entering long from a risk/reward perspective. On the other, the absence of a defined bearish reversal signal hints it is premature to take up the short side. With that in mind, it seems prudent to stand aside.

See what our pattern-recognition algorithm says about key EUR/GBP levels with the GSI indicator !

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

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