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EUR/GBP Technical Analysis: Euro Spikes to Key Resistance

EUR/GBP Technical Analysis: Euro Spikes to Key Resistance

Ilya Spivak,

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Talking Points:

  • EUR/GBP Technical Strategy: Short at 0.8497
  • Euro spiked higher after first round of French presidential election
  • Short trade triggered just below 0.85, aiming for return toward 0.84

The Euro spiked dramatically higher against the British Pound following the results of first-rounding voting in the French presidential election. Prices are now retesting trend line support-turned-resistance whose break last week may have marked completion of a large Head and Shoulders topping pattern.

From here, a daily close above 0.8480 (trend line, March 31 low) opens the door for a test of support-turned-resistance at 0.8605, the March 23 low. Alternatively, a move back below the February 22 bottom at 0.8403 paves the way for a challenge of a double bottom at 0.8334.

The post-election spike triggered the short entry order established last week but the magnitude of the gap and thin liquidity in early-morning Asian trade resulted in significant slippage, putting the trade in at 0.8497 rather than the pre-set rate of 0.8431.

Accordingly, the first target will be revised to 0.8403. A stop-loss is set to activate on a daily close above 0.8518. Half of the trade will be booked and the stop moved to breakeven once the first objective is reached.

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.

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