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EUR/GBP Technical Analysis: Euro Gains Stall, Downturn May Follow

EUR/GBP Technical Analysis: Euro Gains Stall, Downturn May Follow

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Talking Points:

  • EUR/GBP Technical Strategy: Flat
  • Euro stalls after hitting near-9 month high against the British Pound
  • Bearish reversal clues are present but confirmation remains absent

The Euro is struggling to make continued upward progress after rising to the highest level in nearly nine months against the British Pound. Negative RSI divergence points to ebbing upside momentum, hinting that a reversal downward may be in the cards ahead.

Near-term resistance is at 0.8984 (38.2% Fibonacci expansion, rising channel top). A break above that confirmed on a daily closing basis paves the way for a test of the 50% level at 0.9059. Alternatively, a turn back below resistance-turned-support at 0.8923 exposes the 0.8839-59 congestion area.

Current positioning does not seem to offer an actionable trading opportunity. Confirmation of a significant top is absent but bearish overtones are nonetheless present, warning against taking up the long side. On balance, opting for the sidelines seems to be most prudent for now.

What are the forces driving longer-term Euro and British Pound trends? Find out here !

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.