EUR/GBP long-term technical analysis
Euro was stronger than the pound on first January, but at the middle of the month, the course of price change and EUR/GBP fell from the high. The major event in January is about UK Brexit which enter a new round of rules. Supreme Court ruled out decision which requires government to ask parliament approval before triggering article 50.
The supreme court decision helped pound to resist its downtrend as hard Brexit avoided, and there might be a talk of keeping the UK inside Eurozone.
Euro jumped on devaluation accusation
U.S chief trade adviser accused Germany of keeping Euro at a lower rate to exploit benefit from America and Euro trade partner. This accusation denied by Angela Merkel, but Euro jumped after the charge. This event might lead to another currency war as President Trump also criticizes Japan, China, and Germany on devaluation.
EUR/GBP might continue its upward movement unless there is a major change in UK decision on Brexit or change in ECB tapering program which extended in April 2017.
Click here to read previous EUR/GBP long-term technical analysis
New Month
Monthly chart
Another bullish close on the Monthly chart, the price of EUR/GBP attempt to close above 0.8750 but it reversed. The pair might try to break the resistance once again in February. If it decides to move lower, we have broken channel which will provide support when the price visit it.
On sideway scenario, EUR/GBP might enter consolidation between 0.8400 – 0.8750 until Brexit event this March 2017 or the extension of the tapering program by ECB.
Weekly chart
The movement in weekly chart in-line with previous analysis. The price continues its upward movement toward 0.8750, and star correction once bearish pattern formed. EUR/GBP trend is up, and it may or may not test red bullish trendline before the break of resistance 0.8750.
Daily chart
Possible shoulder-head-shoulder pattern formation on the daily chart of EUR/GBP. The pair might experience a reversal of trend if it moves lower below 0.8325. The chance is low, but possible especially if there is a major change in UK Brexit plan. Short-term, traders might need to wait until the price reached support trendline or break above 0.8750.
Trade plan
Long position similar strategies to the previous month, need to wait for a break and re-test above 0.8750. Another option is the long position from the red bullish trendline.
Short position needs to watch price reaction at 0.8750 resistance.