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EUR/GBP Technical Analysis: Support Below 0.88 in Focus

EUR/GBP Technical Analysis: Support Below 0.88 in Focus

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Talking Points:

  • EUR/GBP Technical Strategy: Short at 0.9169
  • Euro selloff pauses after prices hit 4-month low vs. British Pound
  • Break of support below 0.88 figure to pave the way for deeper losses

A breakneck selloff that brought the Euro to the lowest level in four months against the British Pound has paused to digest near the 0.88 figure. The single currency shed nearly 6 percent in a mere three weeks after failing to overcome the high set following last year’s Brexit referendum.

Near-term support is now at 0.8774, the 23.6% Fibonacci expansion, with a break below that on a daily closing basis opening the door for a test of the 38.2% threshold at 0.8696. Alternatively, a turn above 0.89 figure sees the next upside barrier at 0.8977, the 38.2% Fib retracement.

Half of the EUR/GBP trade triggered at 0.9169 remains in play to capture follow-on weakness after partial profit was booked on meeting the position’s first objective. A hard stop-loss order is now in place at the breakeven level. The chart setup will be monitored for opportunities to scale back in.

What makes EUR/GBP one of our top trading ideas for 2017? Find out here !

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