Never miss a story from Daniel Dubrovsky

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Daniel Dubrovsky

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

EUR/GBP Technical Analysis

  • The latest Brexit news sent EUR/GBP crashing through key support
  • Awaiting a close lower to confirm January downtrend renewal next
  • Upside risks include fading downside momentum on the daily chart

Just started trading EUR/GBP? Check out ourbeginners’ FX markets guide!

EUR/GBP is aiming for its lowest close on the weekly chart since May 2017 after support at 0.8620 gave way. There was a brief intraday rally to the upside towards the end of last week after positive RSI divergence on the 4-hour chart hinted of a turn higher. Fundamentally, the backdrop behind gains in the British Pound across the board were due to fading chances of a ‘no-deal’ Brexit. When looking at the medium-term, the next clear-cut area of support doesn’t seem to come in until 0.8337, a place not tested since 2016/2017.

EUR/GBP Weekly Chart

EUR/GBP Technical Analysis: Brexit News Revives Dominant Downtrend

Zooming in on the daily chart below, EUR/GBP experienced its most aggressive decline over the course of 24 hours since January 11 as it fell 0.89%. Drawing a Fibonacci extension that uses the decline in January and reversal to February 14th, we find that prices are sitting right on the 50% midpoint at 0.8593. For those that are bearish, keep an eye on RSI which indicates fading downside momentum. This could precede a retest of the April 2018 lows around 0.8620.

EUR/GBP Daily Chart

EUR/GBP Technical Analysis: Brexit News Revives Dominant Downtrend

If confirmation of the break under critical support is achieved via another close lower on the daily chart, this could be a strong signal that a resumption of the dominant downtrend from January is in store next. Looking at the EUR/GBP 4-hour chart, such a decline would place the next area of interest around the 61.8% extension at 0.8592. On the other hand, pushing above resistance opens the door to testing the descending trend line from February 14 highs.

EUR/GBP 4-Hour Chart

EUR/GBP Technical Analysis: Brexit News Revives Dominant Downtrend

**Charts created in TradingView

FX Trading Resources

--- Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter