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EUR/GBP Technical Analysis: Post-Brexit Swing High Under Fire

EUR/GBP Technical Analysis: Post-Brexit Swing High Under Fire

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • EUR/GBP Technical Strategy: Flat
  • Euro advance meets key swing high set in October 2016 vs British Pound
  • Break higher exposes Fibonacci expansion resistance above the 0.93 figure

The Euro continues to march highest against the British Pound, with prices poised to probe above the 0.93 figure after clearing another layer of chart resistance. The current juncture is made all the more defining by the presence of the swing high established in the months following the Brexit referendum.

From here, a daily close above the 61.8% Fibonacci expansion at 0.9311 opens the door for a challenge of the 76.4% level at 0.9411. Alternatively, a reversal back below the 50% Fib at 0.9231 – now recast as support – paves the way for a retest of 0.9150 (38.2% expansion, rising trend line).

Chasing prices upward seems unattractive. The swing high set in October 2016 looms large at 0.9270, cutting into the available trading range and skewing risk/reward parameters against a long trade. At the same time, the absence of a bearish reversal signal argues against a short position. For now, staying flat seems best.

What do retail traders’ buy/sell decisions hint about Euro and British Pound trends? Find out here !

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

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