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EUR/GBP Technical Analysis: Range Floor Gives Way After ECB

EUR/GBP Technical Analysis: Range Floor Gives Way After ECB

Ilya Spivak,

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Talking Points:

  • EUR/GBP Technical Strategy: Short at 0.8893
  • Down trend started in late-August appears to be resuming once again
  • Short position now in play, initially targeting 38.2% Fib expansion level

The Euro looks to be resuming the down trend launched against the British Pound in late August after the ECB policy announcement proved dovish, as expected. An earlier attempt at re-establishing the down move was aborted earlier in the week but sellers seem to have taken the initiative anew.

From here, a daily close below the 38.2% Fibonacci expansion at 0.8819 opens the door for a challenge of the 0.8743-53 area (50% level, July 14 low). Alternatively, a daily close above range support-turned-resistance at 0.8895 paves the way for a test of falling trend line resistance at 0.8940.

A short EUR/GBP position has been triggered at 0.8893, initially targeting 0.8819. A stop-loss will be activated on a daily close above 0.8940. Profit on half of the position will be booked and the stop-loss moved to breakeven when (and if) the first objective is met.

What makes EUR/GBP a top trade idea for 2017? Find out here !

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