EUR/GBP Technical Analysis: New Downtrend Faces Chart Support
EUR/GBP Technical Analysis
- EUR/GBP prices on longest losing streak since October 2018 after key rising support was broken
- The Euro is facing its next test to extend the new downtrend, horizontal support 0.88384 – 0.88108
- Descending through support exposes November lows next, near-term resistance is around 0.89225
After being confined to trading within a horizontal range between 0.89525 and 0.90607 since December, the Euro is quickly losing ground against the British Pound after a rising support line was breached as anticipated. Not only has EUR/GBP fallen about 2.25% since January 11th, but also the pair achieved its longest daily losing streak since October 9th (5 days). Fundamentally, this has been due to the latest Brexit developments.
It is now facing its next big test that could determine if the new downtrend may accelerate. This is a horizontal range of support in-between 0.88384 and 0.88108 which is composed of the lows achieved back in late November. Coincidentally, the outer boundary of support is where EUR/GBP paused its descent on Wednesday. Falling through may open the door to testing the November 2018 lows around 0.86683.
On the other hand, a turn higher has 0.89225 eyed as immediate resistance. Climbing above it may put the pair back into consolidation mode as 0.90607 – 0.91102 prevents a push to the upside. The rising support line may also present itself as new resistance. You may follow me on Twitter @ddubrovskyFX for more immediate real-time coverage of EUR/GBP and other currency crosses.
EUR/GBP Daily Chart
**Charts created in TradingView
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--- Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.