EUR/GBP Technical Analysis: Rebound Looks to be Corrective
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- EUR/GBP Technical Strategy: Short at 0.8631
- Euro rebound looks corrective as prices stall at former support area
- Short exposure remains active, looking for selling pressure to return
The Euro has stalled after testing support-turned-resistance at a rising trend line that guided prices higher against the British Pound since late June. Thus far, positioning still suggests the recovery from September lows is corrective in the context of a larger down move.
Breaching the support shelf at 0.8365 on a daily closing basis initially opens the door for a test of the 38.2% Fibonacci retracement at 0.8282. Alternatively, break above the intersection of range and trend line support-turned-resistance at 0.8510 sees the next upside barrier at 0.8584.
A EUR/GBP short trade was activated at 0.8631 and profit on half of the position has been booked. A sanguine response to the BOE rate decision hints the fundamental basis for the trade remains compelling. With that in mind, remaining exposure will stay in play with a stop-loss at the breakeven level.
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