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EUR/GBP Technical Analysis: Struggling to Fulfill Bullish Cues

EUR/GBP Technical Analysis: Struggling to Fulfill Bullish Cues

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Talking Points:

  • EUR/GBP Technical Strategy: Flat
  • Euro struggling to make good on bullish clues in technical positioning
  • Better-defined setup sought to make for an actionable trading opportunity

The Euro has struggled to make good on signs of an on-coming advance against the British Pound but a conclusive invalidation of bullish cues has not occurred. A Piercing Line candlestick pattern produced on a test of support at the floor of a Rising Wedge formation continues to argue of the upside.

From here, a daily close above the 0.8783-0.8806 area (23.6% Fibonacci expansion, former support) paves the way for a test of 0.8923 (Wedge top, 38.2% Fib retracement). Alternatively, a push below the 38.2% expansion at 0.8693 opens the door for a challenge of the 50% threshold at 0.8620.

An actionable trade setup seems to be absent at present. Prices are too close to resistance to justify entering long from a risk/reward perspective but bullish overtones in overall positioning warn against taking up the short side. On balance, standing aside seems to be most prudent until a better-defined opportunity emerges.

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