EUR/GBP long-term technical analysis
EUR/GBP ended the first month of 2018 with a bearish close at 0.8750 support. The bearish close is undesirable for the bull but could be tolerated as it stays inside the projection between 0.8750 – 0.9000. The pair continues its consolidation period as the UK and Europe negotiation continue.
From the bank side, there was talk UK BOE could raise interest-rate again in May while ECB stays pat on its interest-rate. Latest ECB conference showered the market with dovish commentary to halt Euro appreciation. In the long-term, Euro should start moving up as data show solid growth. UK pound sterling will wait for Brexit verdict on term and penalties.
Click here to read previous EUR/GBP long-term technical analysis
New Month
Monthly chart
The bear is testing 0.8750 support level in January and closed several pips below it. The close look bearish, but no a decisive one. This month, the bull attempt to push the price higher and turn EUR/GBP trend into bullish. Traders will watch where the pair closed at the end of the month, there is possibility EUR/GBP head lower and close below 0.8750.
Weekly chart
The pair continues traded between 0.8750 – 0.9000 on the weekly chart, but there is the case of lower high. The lower high could indicate the bull is getting weaker. Fortunately, there is no close below 0.8750 after the fourth attempt on the low. As long as the bull maintain the pair above 0.8750, it has a chance to launch toward 0.9000.
Daily chart
Lower on the daily chart, EUR/GBP upward movement limited below the downtrend line. The pair expected to move inside triangle range with the bottom at 0.8700. The bull needs to make a breakthrough above the trendline before the trend could change. On the other hand, the bear will make a continuous attempt on 0.8700 – 0.8750 support area.
Trade plan
Traders suggested trading the bisque color box range until breakout happens. Long position around 0.8750 – 0.8800 and short position around 0.8980 – 0.9020 might be the best scenario to consider. (Same scenario as Jan’18).