EUR/GBP long-term technical analysis

Euro plagued by the strength of U.S dollar following the hawkish sentiment is thrown by The Fed and faster inflation than expected. U.S dollar index starts to move higher and put all its counterpart under pressure. The pressure in EUR is higher compared to GBP which lead EUR/GBP sink in April.

Fortunately, the pair gained composure and erase all of its losses to close near its opening level for the month. This month, there is bullish sentiment brewing in EUR/GBP and could lead the pair higher. However, the global situation revolving around U.S-China trade relationship might once again give a hard time for U.S dollar counterpart. Nevertheless, we expect the situation will turn better and lead EUR/GBP higher.

Click here to read previous EUR/GBP long-term technical analysis

New Month

Monthly chart

EUR/GBP closed above 0.8750 after it slipped in April. The situation prolongs the consolidation inside the pink box shown on the monthly chart. The pair is currently moving up and testing previous month high. Will we see upward continuation this month?

Weekly chart

The bullish engulfing pattern on the weekly chart is the initiation of bounce in EUR/GBP. The pair has moved above the black trendline and print new weekly high. Long position with a stop below the bullish engulfing pattern might be one of a good idea.

Daily chart

If EUR/GBP continue upward, then it will encounter the red trendline resistance where it is expected to halt or reverse. The short-term short position could be taken near the red trendline. Moreover, the top of the pink box is a better location to look for the short position.

Trade plan

The outlook of EUR/GBP shows a sideways situation with bearish scenario favored. Traders could use the trendline on the daily chart to look for a short position. Another scenario to consider is a breakout below the yellow box and followed by retest before traders could place short position. (Same scenario as previous month)