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EUR/GBP Technical Analysis: Double Top Taking Shape Below 0.89?

EUR/GBP Technical Analysis: Double Top Taking Shape Below 0.89?

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Talking Points:

  • EUR/GBP Technical Strategy: Flat
  • Euro may be forming double top below 0.89 vs British Pound
  • Further confirmation sought before entering short position

The Euro put in a bearish Dark Cloud cover candlestick pattern, hinting a double top may be taking shape below the 0.89 level versus the British Pound. Negative RSI divergence points to ebbing upside momentum and bolsters the case for a downside scenario.

A daily close below resistance-turned-support at 0.8787 (March 13 high) opens the door for a test of 0.8717 (June 16 low). Alternatively, a push above the 0.8848-52 area (January 16 high, 23.6% Fibonacci expansion) paves the way for a challenge of the 38.2% level at 0.8929.

Prices are sitting squarely at near-term support, arguing against entering short from a risk/reward perspective. Opting to wait for further confirmation seems most prudent for the time being until an actionable selling 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.