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EUR/GBP Technical Analysis: Move Back Below 0.88 Hinted Ahead

EUR/GBP Technical Analysis: Move Back Below 0.88 Hinted Ahead

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • EUR/GBP Technical Strategy: Pending short at 0.8878
  • Euro down move may be back in play after counter-trend support line break
  • Modest corrective bounce sought for improved risk/reward setup to get short

The Euro has broken support guiding the upswing since the beginning of the month, hinting that its down trend against the British Pound may be resuming. Prices have been consolidating in a choppy range but the overall bias has favored weakness since they recoiled from the post-Brexit vote high in late August.

From here, a daily close above below the 38.2% Fibonacci expansion at 0.8796 opens the door for a challenge of the 0.8728-46 area (September 27 low, 50% level). Alternatively, a move back above the 23.6% Fib at 0.8879 paves the way for another test of the 14.6% expansion at 0.8931.

Entering short seems compelling but risk/reward parameters need a bit of improvement. With that in mind, an entry has been established to sell EUR/GBP at 0.8878. If activated, the trade will initially target 0.8796 and carry a stop-loss activated on a daily close above 0.8920.

Not sure where to start on your EUR/GBPtrading strategy? Check out our beginners’ guide!

EUR/GBP Technical Analysis: Move Back Below 0.88 Hinted Ahead

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