EUR/GBP Technical Analysis: Euro Surges to 8-Month High
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- EUR/GBP Technical Strategy: Flat
- Euro surges to an eight-month high versus the British Pound
- Risk/reward considerations argue against a long trade for now
The Euro looks poised to continue higher after jumping to the highest level in eight months and reclaiming a foothold above the 0.89 figure against the British Pound. The move follows a month of sideways consolidation and hints the rising trend set from mid-April lows has resumed.
Near-term resistance is now at 0.8973, the 38.2% Fibonacci expansion, with a break above that on a daily closing basis opening the door for a test of the 50% level at 0.9040. Alternatively, a reversal back below the 23.6% Fib at 0.8891 exposes the 0.8840-52 area (14.6% expansion, January 16 high).
The EURGBP short position activated at 0.8778 was stopped out. Current positioning argues for taking up the long side but structuring a trade with acceptable risk/reward parameters seems challenging at least until 0.8891 can be seen to hold as support. With that in mind, opting to stay flat seems most prudent.
Where will the Euro and Pound trade three months from now? See our forecasts here!
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