EUR/GBP Technical Analysis: 2-Month Trend Support Broken
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- EUR/GBP Technical Strategy: Pending short at 0.8994
- Euro breaks below two-month rising trend line against British Pound
- Looking to enter short just below 0.90 figure if prices correct upward
The Euro slipped below support guiding prices upward against the British Pound since early September, hinting a trend reversal may be in the works. Sterling strengthened after a London High Court set a roadblock for the government’s Brexit plans and the BOE QIR report struck a cautiously hawkish tone.
Near-term support is now at 0.8885, the 38.2% Fibonacci retracement, with a break below that on a daily closing basis opening the door for a challenge of the 50% level at 0.8780. Alternatively, a reversal back above the 0.8985-0.9049 area (trend line, November 2 high) exposes the October 11 top at 0.9142.
Prices are too close to support to justify entering short at current levels from a risk/reward perspective. With that in mind, an entry order will be established to sell the pair at 0.8994 in the event of a correction to re-test former trend line support as resistance.
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