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EUR/GBP Technical Analysis: Year to Date Down Trend Broken?

EUR/GBP Technical Analysis: Year to Date Down Trend Broken?

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Talking Points:

  • EUR/GBP Technical Strategy: Flat
  • Euro soars to the highest level in 2 months vs. British Pound
  • Prices are on pace to overturn the year-to-date down trend

The Euro has surged to the highest level in two months against the British Pound and now looks poised to break channel resistance capping gains since the start of the year. The latest upside push follows deepening political uncertainty ahead of the UK general election on June 8.

Confirmation of the channel top break on a daily closing basis opens the door for a test of the March 13 high at 0.8787. Alternatively, a reversal back below the 76.4% Fibonacci expansion at 0.8675 sees the next downside barrier at 0.8606, the 61.8% level.

The short EUR/GBP position activated at 0.8577 was stopped out. The absence of a clear-cut bearish reversal signal argues against attempting to re-enter while taking up the long side seems premature absent confirmation of a breakout. With that in mind, opting for 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.