EUR/GBP Technical Analysis: Will the Dominant Downtrend Resume?

15

EUR/GBP Technical Analysis

  • EUR/GBP extends near-term uptrend after bullish reversal warning signal
  • On the 4-hour chart, prices attempting to resume the dominant downtrend
  • Closes to the downside required before arguing the pair may keep falling

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

Previously, I highlighted a bullish reversal signal in EUR/GBP which resulted in the pair climbing over 1% before trimming gains to about 0.3%. On the daily chart below, the lower range of horizontal resistance held at 0.88108 which further reinforced this area. Prices then fell through the next area of interest at 0.87637.

From here, near-term support appears to be at 0.87234 which is the October 10 low. A descent through it exposes a horizontal range of support between 0.86983 and 0.86683. The reason I am highlighting these support levels is because of what is brewing on the 4-hour chart.

EUR/GBP Daily Chart

EUR/GBP Technical Analysis: Will the Dominant Downtrend Resume?

EUR/GBP 4-Hour Chart

Zooming in on the chart below, the Euro has descended through the near-term rising support line against the British Pound. Since then, prices rebounded just above 0.87234 to close just below 0.87637 (support levels mentioned above).

The close under the trend line will require further confirmation to argue that EUR/GBP could be heading lower next. This could be the case if on the daily chart, the pair ends a day under 0.87234. Otherwise, the bullish reversal highlighted last could remain in play guiding EUR/GBP to the upside.

You may follow me at @ddubrovskyFX for more timely updates should the pair make active moves in the interim.

EUR/GBP Technical Analysis: Will the Dominant Downtrend Resume?

**Charts created in TradingView

FX Trading Resources

  • Join a free Q&A webinar and have your trading questions answered
  • Just getting started? See our beginners’ guide for FX traders
  • See our free guide to learn what are the long-term forces Euro prices
  • See how the British Pound and Euroare viewed by the trading community at the DailyFX Sentiment Page

LEAVE A REPLY

Please enter your comment!
Please enter your name here