EUR/GBP Technical Strategy: Flat
- Euro breaks above 9-month chart resistance against British Pound
- A break of March swing high might open the way above 0.90 figure
- Near-term positioning hints entering long trade premature for now
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The Euro may be on the cusp of launching a sustained move higher against the British Pound after breaching nine-month trend resistance.
With the series of lower highs and lows established from October 2017 now invalidated, prices look poised to challenge the March 7 high at 0.8968. A daily close above that opens the door for a test of the October 12 peak at 0.9033. Alternatively, a turn back below resistance-turned-support – now at 0.8876 – exposes a rising trend line guiding the upswing since mid-June (currently at 0.8841).
A look at shorter-term positioning seems to argue against buying in however. The four-hour chart reveals that the near-term uptrend has been broken, with a deeper pullback possible if the pair manages to get below 0.8924. From a tactical perspective, it seems premature to commit to commit on the long side before this retracement finds a demonstrable bottom.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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