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Talking Points:
- EUR/GBP Technical Strategy: Flat
- Euro descends to four-month trend support vs. British Pound
- Behavior here likely to be formative for near-term direction
The Euro finds itself at a critical cross-roads as prices test support guiding the move higher against the British Pound since December 2016. Behavior here will help establish if the expected topping below the 0.88 figure marked a near-term pull-back or a larger downward trend reversal.
From here, a daily close below the 0.8469-80 area (trend line, March 31 low) paves the way for a challenge of the February 22 bottom at 0.8403. Alternatively, a move back above support-turned-resistance at 0.8605 (March 23 low) targets a chart inflection point at 0.8687.
Needless to say, positioning is inconclusive at this point. On one hand, a breakdown has not been confirmed and entering short with prices sitting squarely on support is unattractive from a risk/reward perspective. On the other, a bullish reversal signal is absent. Staying flat seems most prudent for now.
What makes EUR/GBP one of the top DailyFX trades for 2017? See our forecast and find out!
