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EUR/GBP Technical Analysis: Upside Correction Under Way?

EUR/GBP Technical Analysis: Upside Correction Under Way?

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Talking Points:

  • EUR/GBP Technical Strategy: Flat
  • Euro validates signs of bearish exhaustion, breaks higher vs. Pound
  • Booking profit on short exposure as larger correction looms ahead

The Euro turned higher against the British Pound as expected, with prices breaking the boundaries of the near-term down trend in play since mid-November. The dominant trajectory continues to favor weakness but a larger correction upward may be in the cards ahead.

From here, a daily close above the 23.6% Fibonacci retracement at 0.8522 opens the door for a test of the 38.2% level at 0.8656. Alternatively, a move back below the 14.6% Fib at 0.8439 paves the way for a challenge of double bottom support at 0.8330.

A EUR/GBP position was set to activate at 0.8994 and partial profit subsequently booked after prices reached the trade’s initial objective. Remaining exposure will now be booked as positioning warns of a near-term bias shift ahead of a much-anticipated ECB rate decision.

How will the ECB announcement move the Euro? Join the webinar and follow the announcement live!

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