News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Euro Outlook Versus Sterling: EUR/GBP Heading for Key Resistance?

Euro Outlook Versus Sterling: EUR/GBP Heading for Key Resistance?

Dimitri Zabelin, Analyst

EUR/GBP, Euro, Sterling, Brexit – TALKING POINTS

  • EUR/GBP heading for critical resistance
  • Will the pair begin to reverse downtrend?
  • Brexit drama could induce high volatility

Learn how to use political-risk analysis in your trading strategy!

The Euro may rise against the British Pound in the week ahead with EUR/GBP appearing to rebound after it hit a four-month low at 0.8786 (gold dotted line). The next major price level may be former support-now-turned resistance at 0.8917 (white speckled line).

EUR/GBP Outlook: Recovery Ahead?

Chart showing EUR/GBP

EUR/GBP chart created using TradingView

EUR/GBP’s potential turn-around comes after the pair retreated over five percent after it reached a three-year high on the back of closing higher for 14 consecutive weeks. A weekly chart illustrates EUR/GBP’s spectacular fall after it broke through a multi-month rising support zone (yellow channel).

A Daunting Path Ahead

Chart showing EUR/GBP

EUR/GBP chart created using TradingView

However, the road to recovery remains formidable, though recent history has shown that unexpected fundamental developments – primarily related to Brexit – can provide a boost to the pair. However, traders may be cautious about committing capital on the basis of hoping that growing fears of a no-deal Brexit will pressure Sterling and push EUR/GBP higher.

Instead, they may wait for the pair to clear resistance at 0.8917 with follow-through before adding additional exposure. However, as noted in previous Euro-Sterling forecasts, performing technical analysis on any GBP crosses is unusually difficult due to it being chained to a fundamentally volatile environment.

EUR/GBP 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.

DISCLOSURES