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EUR/GBP Technical Analysis: Euro Trend Still Favors Weakness

EUR/GBP Technical Analysis: Euro Trend Still Favors Weakness

2018-05-07 00:00:00
Ilya Spivak, Head Strategist, APAC
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EUR/GBP Technical Strategy: Flat

  • Euro rebound brings prices toward 2-month high vs British Pound
  • Overall trajectory defined by falling channel set from October 2017
  • Waiting for actionable signal, improved risk/reward setup for trade

The Euro continues to inch upward against the British Pound but the dominant price trend continues to favor a downside bias for the single currency. The pair has recovered to the highest level in nearly two months but price action remains firmly locked within a falling channel set from October 2017.

Major resistance comes in at 0.8904, the confluence of a former chart inflection point as well as the trend channel top. A close above that confirmed on a daily closing basis exposes the March 7 high at 0.8968. Alternatively, a turn below resistance turned-support at 0.8797 targets counter-trend support at 0.8730.

See our free guide to help build confidence in your EUR/GBP trading strategy!

Euro vs British Pound daily price chart

Prices are too close to immediate resistance to justify entering long from a risk/reward perspective. On the other hand, the absence of a clearly-defined topping signal warns against taking up the short side to bet on bearish trend resumptionprematurely. On balance, standing aside seems most sensible for now.

EUR/GBP TRADING RESOURCES

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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