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Brexit Uncertainty Sends EURGBP to 22-Month High: Will it Hold?

Brexit Uncertainty Sends EURGBP to 22-Month High: Will it Hold?

2019-08-02 03:30:00
Dimitri Zabelin, Junior Currency Analyst
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EURGBP TECHNICAL ANALYSIS

  • Brexit uncertainty pushing EURGBP to 22-month highs
  • In week ahead, the pair may test critical support levels
  • EURGBP strength at the mercy of political volatility?

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Contrary to my previous weekly technical forecast, EURGBP’s retreat appeared to have been short lived after it was interrupted by Brexit uncertainty that caused the British Pound to plummet. The pair is now testing a 22-month high after spiking over 2.50 percent in the less than a week. The pair may now look to test resistance-turned-support at 0.9110 (highest red dotted line).

EURGBP Tips Hat to Brexit Uncertainty

Chart Showing EURGBP

EURGBP chart created using TradingView

Zooming out to a weekly chart, earlier this month the pair appeared as if it was beginning to lose steam after closing higher for 11 consecutive weeks. However, uncertainty about an orderly Brexit pressured Sterling lower across most crosses and instead led EURGBP to spike.

EURGBP Weekly Chart – July 25

Chart Showing EURGBP

EURGBP chart created using TradingView

EURGBP Weekly Chart – August 1

Chart Showing EURGBP

EURGBP chart created using TradingView

Looking ahead, EURGBP will likely again test resistance-turned-support at 0.9110 before advancing higher or retreating. As mentioned in my previous articles, performing technical analysis on any GBP-crosses is difficult because of the currency’s tie to a politically-volatile environment. If the pair fails to consistently close above 0.9110, it may hover below but above 0.9060.

EURGBP TRADING RESOURCES

--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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