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EUR/GBP Technical Analysis: Euro Rally Stalls - Now What?

EUR/GBP Technical Analysis: Euro Rally Stalls - Now What?

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Talking Points:

  • EUR/GBP Technical Strategy: Flat
  • Euro rally stalls below 0.86 figure against the British Pound
  • Overall trend still bearish but actionable trade setup absent

A Euro recovery has paused to digest gains below the 0.86 figure after prices advanced to the highest level since mid-March against the British Pound. The trend since the beginning of the year continues to be defined by a series of lower highs and lows, but at this point just barely so.

From here, a daily close above the May 26 high at 0.8751 opens the door for a test of the 0.8787-94 area (March 3 high, 38.2% Fibonacci expansion). Alternatively, a turn below the 23.6% Fib retracement at 0.8664 sees the next downside barrier at 0.8611, the 38.2% threshold.

A compelling trading opportunity looks to be absent for now. The absence of a defined short trade signal warns against attempting to fade recent gains while proximity to resistance means that betting on continuation is unattractive from a risk/reward perspective. On balance, standing aside seems prudent for now.

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.