EURGBP TECHNICAL ANALYSIS
- EURGBP decline may accelerate in the week ahead
- Critical support level to monitor possibly at 0.9110
- Volatile Italian politics could result in Euro selloff
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EURGBP has closed higher for 14 consecutive weeks after it briefly touched the upper bound of a three-year support range between 0.8300-0.8477 (red dotted lines). The pair’s decline may accelerate next week if political volatility in Italy pressures the pair and leads to a selloff in the Euro.
Exhausted Pair May be Ready to Descend
EURGBP chart created using TradingView
Looking at a daily chart, EURGBP was climbing along a rising-support channel (yellow lines) before breaking below it with follow-through. Traders may wait to add exposure to any long positions until the pair tests critical support at 0.9110 (red dotted line). A rebound from this floor with confirmation may push buyers into the market and push the pair higher.
EURGBP – Daily Chart
EURGBP chart created using TradingView
Looking ahead, headline-breaking news related to Brexit will be particularly important to monitor because of its frequent impact on GBP. When the pair initially was initially losing steam in the 12th week and was looking to close lower, fears of a no-deal Brexit pressured Sterling and sent the pair to two-year highs.
EURGBP TRADING RESOURCES
— Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com
To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter