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EUR/GBP Technical Analysis: Signs of Major Topping Return

EUR/GBP Technical Analysis: Signs of Major Topping Return

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Talking Points:

  • EUR/GBP Technical Strategy: Short at 0.8778
  • Euro poised to test near-term range floor vs British Pound
  • Candle pattern hints longer-term double top may be forming

The Euro slipped into the lower half of its recent range against the British Pound, hinting a test of the lower boundary may be in the cards ahead. Furthermore, the appearance of a bearish Dark Cloud Cover candlestick pattern hints a larger double top chart setup may be brewing.

From here, a daily close below the June 16 low at 0.8720 opens the door for a test of the 38.2% Fibonacci retracement at 0.8665. Alternatively, a move back above range midline and March 13 high at 0.8787 opens the door for a test of the major upside barrier at 0.8852.

An intraday bounce yesterday offered satisfactory risk/reward conditions and a short trade has been triggered at 0.8778, initially targeting 0.8720. A stop-loss will be activated on a daily close above 0.8787. Profit on half of the trade will be taken and the stop-loss moved to breakeven once the first target 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.