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EUR/GBP Technical Analysis: Bias Still Bearish Amid Congestion

EUR/GBP Technical Analysis: Bias Still Bearish Amid Congestion

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Talking Points:

  • EUR/GBP Technical Strategy: Flat
  • Euro remains locked in a choppy range above the 0.87 figure vs. British Pound
  • Overall bias still seems bearish but an actionable trade setup is absent for now

The Euro is struggling to find lasting near-term direction against the British Pound once again but overall positioning continues to favor a broadly bearish bias. While downside progress has been cut short above the 0.87 figure, the series of lower highs and lows started in late August remains intact.

From here, a daily close below the 0.8721-46 area (September 27 low, 38.2% Fibonacci expansion) paves the way for a challenge of the 50% level at 0.8653. Alternatively, a move back above the 0.8856-81 congestion region opens the door for a test of resistance in the 0.8924-52 zone (trend line, 38.2% Fib retracement).

An actionable trade setup seems absent for the time being. Choppy sideways trade doesn’t offer a clear entry signal one way or another and poor risk reward parameters make tactical bets near range extremes unattractive. On balance, opting for the sidelines seems most prudent.

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