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EUR/GBP Technical Analysis: Euro Drops Most in 6 Months

EUR/GBP Technical Analysis: Euro Drops Most in 6 Months

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • EUR/GBP Technical Strategy: Flat
  • Euro suffers worst loss in six months versus the British Pound
  • Reversal of near-term rising trend lacks confirmation for now

The Euro suffered the largest daily loss in six months against the British Pound but the boundaries of the upswing from December lows remain intact. This warns that while the corrective upswing of the past six weeks may be ending, clear technical confirmation saying as much is absent for now.

A daily close below the 23.6% Fibonacci expansion at 0.8624 opens the door for a test of the 38.2% level at 0.8484. Alternatively, a reversal back above the 14.6% Fib at 0.8711 – a former support barrier now recast as resistance – paves the way for a retest of the January 16 high at 0.8852.

Prices are too close to near-term support to justify entering short from a risk/reward perspective, even if reversal confirmation were in place. With that in mind, staying on the sidelines seems most attractive at this stage until the pair offers a better-defined opportunity.

Why do some DailyFX analysts see EUR/GBP as a top trade idea in 2017? Find out here !

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

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