Currency Pair: EUR/GBP
Short-Term Bias: Short
Chart: 15 Min Charts
After peaking to 0.8186 last Thursday, the EUR/GBP has retraced below 0.8100 to fill in the gap from last week.
Analysis Update
Price action has diverged from the channel, and has crossed above the 120 SMA line within the last few hours of trading. The EUR/GBP could test 0.8090 (61.8% Fib level 0.7936 - 0.8188) for resistance, but we expect price action to fall back within the channel over the next trading session.
We expect the downward trend in the 120 SMA to hold for the near-future, and expect the euro-pound to break below 0.8032 (38.2% Fib level 0.7936 - 0.8188) later on this week. The new found weakness in the euro could bring an end to the uptrend initiated back in 2007, and we may see the EUR/GBP attempting to move higher before it breaks to the downside. However, the fundamental event risks scheduled for the next 24 hours may call for a change in our outlook.
Analysis
After peaking to 0.8186 last Thursday, the EUR/GBP has retraced below 0.8100 to fill in the gap from last week. Price action continues to hold below the 120 SMA, and has found short-term support near 0.8032 (38.2% Fib level 0.7936 - 0.8188).
The downward trend in the 120 SMA has led us to hold a bearish outlook for the euro, and we expect the recent broad based selling in the euro to continue throughout the trading session. We anticipant the euro-pound to move lower within its current range, and may see it work its way towards 0.8000 over the next few trading hours. Over the next few days, we expect the pair to test 0.7885 for near-term support, and may fall back within its previous range between 0.7795 - 0.8040 over the coming weeks. Be sure to check out Jamie’s Technical Outlook for additional information on the major currency pairs.
To contact the author of this article, please email: dsong@fxcm.com
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