EUR/GBP Technical Analysis: Down Trend Preparing to Resume?
To receive Ilya's analysis directly via email, please SIGN UP HERE
- EUR/GBP Technical Strategy: Flat
- Euro may be ready to resume down trend vs British Pound after range top test
- Breakdown confirmation, acceptable risk/reward setup needed to enter short
The Euro recoiled from familiar range resistance above the 0.90 figure against the British Pound, with prices flirting with a revival of the down started in late August. Prices have languished in sideways consolidation for two months but the overall bias has favored weakness since the trend turned at the post-Brexit vote high.
Immediate support is at 0.8879 (trend line, 23.6% Fibonacci expansion), with a break below that on a daily closing basis exposing the 38.2% level at 0.8796. Alternatively, a move back above the 14.6% Fib at 0.8931 paves the way for a retest of the 0.9015-33 area (October 12, November 15 highs).
Confirmation of a near-term bearish reversal requires a break of trend line support set from the November 1 swing low. Absent that, the bias remains defined by a series of higher highs and lows. When (and if) the break occurs, risk/reward parameters will be evaluated to see if a selling opportunity exists.
What is the #1 mistake that traders make, and how can you fix it? Find out here!
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.