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EUR/GBP Technical Analysis: Taking Aim Below 0.85 Figure

EUR/GBP Technical Analysis: Taking Aim Below 0.85 Figure

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Talking Points:

  • EUR/GBP Technical Strategy: Short at 0.8604
  • Euro slips below 0.86 figure vs. Pound, hints down trend resuming
  • Sellers now aim to test under 0.85 mark, short position activated

The Euro looks to be resuming the down move begun against the British Pound in October after a corrective recovery from early-December lows. Prices have established a foothold below the 0.86 figure, hinting that deeper losses are on the horizon.

From here, a daily close below the 38.2% Fibonacci expansion at 0.8484 opens the door for a test of the 0.8334-70 area (double bottom, 50% level). Alternatively, a move back above the 23.6% Fib at 0.8624 paves the way for another challenge of the 14.6% expansion at 0.8711.

Risk/reward parameters now look acceptable and a short trade has been activated at 0.8604, initially targeting 0.8484. A stop-loss will be activated on a daily close above 0.8624. Profit on half of the trade will be taken and the stop moved to breakeven when the first objective has been met.

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.