EUR/GBP Technical Analysis: 0.8500 In Focus Ahead
- EUR/GBP edging higher and trading around an area of resistance
- Further upside conviction might require a break above the 0.85 handle
- The 0.8250 level appears to be the initial focus for possible support
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At this stage, it looks like further upside conviction might need to see a break above the 0.85 figure and possible trend line resistance (which has already seen two rejection since the last report), that could signal further bullish intentions.
A break higher may expose the “post-Brexit” highs at the 0.8626 level before a potential area of resistance from 2013 above the round 0.87 number.
A hold below the 0.85 handle may put the focus on the 0.8250 level for possible support initially, but longs might hold back from entering there without seeing new highs first.
If this scenario plays out, is seems likely that focus will be put on the zone below 0.81 to the 0.80 level which also coincides with possible long term trend line support and the 0.38 Fib of the up move (as measured from the November 2015 lows), for possible reemergence of the uptrend.
Meanwhile, the DailyFX Speculative Sentiment Index (SSI) is showing that about 41.5% of traders are long the EUR/GBP at the time of writing, reducing shorts on the move up.The SSI is mainly used as a contrarian indicator, implying a slight long bias.
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EUR/GBP Daily Chart: August 2, 2016
--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com
To contact Oded Shimoni, e-mail firstname.lastname@example.org
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.