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EUR/GBP Technical Analysis: Euro Clears Channel Resistance

EUR/GBP Technical Analysis: Euro Clears Channel Resistance

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Talking Points:

  • EUR/GBP Technical Strategy: Flat
  • Euro breaks monthly channel resistance, hints at further gains vs. Pound
  • Longer-term positioning favors weakness but trade setup absent for now

The Euro broke above resistance capping gains versus the British Pound for nearly a month, hinting the near-term bias may have shifted in favor of the upside. Longer-term positioning may signal otherwise however, with prices potentially carving out a significant top.

From here, a daily close above the 38.2% Fibonacci expansion at 0.8610 opens the door for a challenge of the February 6 high at 0.8645, followed by the 50% level at 0.8675. Alternatively, a reversal back below the 23.6% Fib at 0.8530 paves the way for a retest of the 14.6% expansion at 0.8481.

A short position triggered at 0.8461 was stopped out on a narrow close above 0.8506. Current positioning does not appear to offer an attractive setup to re-establish exposure and opting for the sidelines seems most prudent until a better-defined opportunity presents itself.

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.