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EUR/GBP Technical Analysis: Back at Familiar Range Floor

EUR/GBP Technical Analysis: Back at Familiar Range Floor

Ilya Spivak,

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Talking Points:

  • EUR/GBP Technical Strategy: Flat
  • Euro struggling to build momentum, stalling at range floor
  • Looking for actionable setup, bearish trend bias favored

The Euro is struggling to build downside momentum after seemingly resuming its longer-term bearish trend against the British Pound in late January. Prices are mired in a choppy range below the 0.87 figure and seemingly waiting for a potent-enough catalyst to rekindle momentum.

Near-term support is in the 0.8470-84 area (January 26 low, 38.2% Fibonacci expansion), with a break below that on a daily closing basis opening the door for a test of the 0.8334-70 zone (double bottom, 50% level). Alternatively, a break above the February 6 high at 0.8643 exposes the 14.6% Fib at 0.8711.

On one hand, prices are too close to support to justify entering short from a risk/reward perspective. On the other, the absence of an actionable bullish signal and broadly bearish longer-term positioning argue against taking up the long side. Staying on the sidelines seems most prudent.

What makes EUR/GBP one of the top DailyFX trades for 2017? See our forecast and find out!

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