EUR/GBP Technical Analysis: Euro Down Trend About to Resume?
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- EUR/GBP Technical Strategy: Flat
- The Euro may be readying to turn lower anew after testing the 0.90 figure
- Breakdown confirmation, improved risk/reward needed to re-enter short
The Euro may be readying to resume the down trend started in late August against the British Pound after a corrective upswing stalled ahead of the 0.90 figure. A pair of bearish candlestick patterns has emerged and negative RSI divergence bolsters the case for a downside scenario.
Near-term support is at 0.8891 (14.6% Fibonacci expansion, former trend line resistance), with a daily close below that opening the door for a retest of the September 27 low at 0.8746. Alternatively, a sustained push above the 23.6% Fib at 0.8981 exposes the 38.2% expansion at 0.9126.
The remaining portion of a short EUR/GBP trade triggered at 0.9169 was covered at the daily close on October 6 after profit was booked on the first half. Prices may be starting to turn lower anew but proximity to immediate support argues against re-entering the trade on risk/reward grounds, at least for now.
Where are the Euro and British Pound heading in the fourth quarter? See our forecasts here!