EUR/GBP Eyeing Range Ceiling Again as Euro and Pound Consolidate
EUR/GBP Technical Analysis
- EUR/GBP reverses course, turning higher
- But Euro is still consolidating versus GBP
- Sentiment signals recently turned bullish
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The Euro has been gaining ground against the British Pound as of late, fundamentally driven by pessimism of a Brexit deal between UK Prime Minister Theresa May and Opposition Leader Jeremy Corbyn. This comes after EUR/GBP tested critical range support between 0.8472 and 0.8530, as anticipated.
Technically, gains in EUR/GBP over the past several days were accompanied by a Bullish Harami candlestick pattern on the daily chart below. Then, near-term resistance was tepidly cleared above 0.8620. This has opened the door to testing range resistance next between 0.8698 and 0.8668.
It still remains to be seen whether or not EUR/GBP can achieve a meaningful break, be it higher or lower, to exit its persistent consolidation from late February. Ideally, a breakout should be supported by fundamental drivers. Last week, we got a taste of how pressure to reach a Brexit deal, with a hawkish BoE on the sidelines, can bolster Sterling.
EUR/GBP Daily Chart
Chart Created in TradingView
EUR/GBP Bullish Sentiment Bias
Accompanying gains in EUR/GBP was a shift in trader positioning offering a bullish-contrarian trading bias. Traders are now further net-short than yesterday and last week on the chart below. If you are interested in learning more about this, join me every week on Wednesday’s at 00:00 GMT as I uncover what positioning has to say about prevailing market trends!
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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.