EUR/GBP, Brexit – TALKING POINTS
- EURGBP downtrend may reverse in coming week
- Brexit-related volatility may undermine chart set up
- Pair is now edging closer to critical July support level
Learn how to use political-risk analysis in your trading strategy!
Since reaching its three-year peak on August 8, EUR/GBP has declined almost five percent. Along the way down, the pair broke through several critical support channels and layers, leaving EUR/GBP now exposed to a critical floor at 0.8924.
EURGBP – Daily Chart
EUR/GBP chart created using TradingView
A break below key support with follow-through could prompt an aggressive selloff as traders lose faith in the pair’s upside potential – at least for now. Conversely, a recovery from the floor could stave off a rapid decline with traders eyeing the next level of resistance at 0.9039.
EUR/GBP – Daily Chart
EUR/GBP chart created using TradingView
However, these technical set ups could be in danger of being derailed by sporadic Brexit-related developments that have been a key catalyst behind GBP’s price action. Therefore, traders may hesitate to add exposure or enter positions until more clarity is given to the entangled political debacle we call Brexit.
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