EUR/GBP Daily Chart
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EUR/GBP at Risk for a Larger Pullback- Bearish Invalidation 8822

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Talking Points

  • EUR/GBP responds to confluence resistance- interim support 8664
  • Updated targets & invalidation levels
  • Clic k H ere to be added to Michael's email distribution list .

EUR/GBP Daily

Technical Outlook: EURGBP has responded to confluence resistance at 87 23 / 39 - this region is defined by the 100% extension of the advance off the 2015 low, the 50% retracement of the October decline & the August swing high. Note that today's stretch high saw a perfect tag of basic trendline resistance extending off the October 11 th high and if we close at these levels would constitute a daily pin bar -further highlighting the risk of a pullback from these levels.

Interim support rests with the ascending median-line (~ 866 4 ) with more significant support seen at 8526/47 - are of interest for exhaustion / long-entries. A break below this level would be needed to suggest that a more meaningful reversal is underway. A breach above near-term resistance still has to contend with a key technical barrier at 8815/22 where the 2013 high & 61.8% retracement converge on slope resistance.

EUR/GBP 24 0min

Notes: The pair has been trading within the confines of an ascending pitchfork formation off the December lows with the median-line highlighting a near-term support confluence at 8664 . A break below this region validates the short-bias with subsequent support targets eyed at 8598 & 8547 .

Bottom line: the risk remains for a move lower while below the 161.8% extension at 8763 with a break below support to validate our near-term bearish outlook. Ultimately we'll be looking to buy a larger set-back into structural support. A quarter of the daily average true range (ATR) yields profit targets of 19-22 pips per scalp. Added caution is warranted tomorrow with a string of UK data & BoE Governor Carney's testimony before Parliament's Treasury Select Committee likely to fuel added volatility in the Sterling crosses.

Relevant Data Releases

Other Setups in Play:

Looking for more trade ideas? Review DailyFX's 2017 1Q Projections

---Written by Michael Boutros, Currency Strategist with DailyFX

J oin Michael for Live Weekly Trading Webinar s on Mondays on DailyFX at 1 3:30 GMT ( 8 :30ET)

Follow Michael on Twitter @MBForex or contact him at mboutros@dailyfx.com

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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