To receive Ilya’s analysis directly via email, please SIGN UP HERE
- EUR/GBP Technical Strategy: Flat
- The Euro may be readying to turn lower anew after testing the 0.90 figure
- Breakdown confirmation, improved risk/reward needed to re-enter short
The Euro may be readying to resume the down trend started in late August against the British Pound after a corrective upswing stalled ahead of the 0.90 figure. A pair of bearish candlestick patterns has emerged and negative RSI divergence bolsters the case for a downside scenario.
Near-term support is at 0.8891 (14.6% Fibonacci expansion, former trend line resistance), with a daily close below that opening the door for a retest of the September 27 low at 0.8746. Alternatively, a sustained push above the 23.6% Fib at 0.8981 exposes the 38.2% expansion at 0.9126.
The remaining portion of a short EUR/GBP position triggered at 0.9169 stopped out at breakeven after profit was booked on the trade’s first half. Prices may be starting to turn lower anew but proximity to immediate support argues against re-entering the trade on risk/reward grounds, at least for now.
Where are the Euro and British Pound heading in the fourth quarter? See our forecasts here!