Forex Technical Update
Previous: EUR/GBP Continues to Struggle with 0.84 Resistance (2/13)
For the EUR/GBP, the 0.84 handle represents a key resistance for price action since mid Dec 2011. The 2/22 European market pushed the pair above this resistance, making new 2012 highs and breaking out of a consolidation pattern. The 4H chart shows the strength of the breakout candle and the momentum turning bullish in the short to medium term as the RSI pushes above 70, though in the near-term this might suggest overbought conditions.
The daily chart shows that this break pushes above a recent ascending triangle. The next key resistance is just above 0.85. This is in a previous support pivot area and nears the declining trendline that extends back to the June 2011 high of 0.9082. If price action picks up speed to the upside, this trendline is probably a bit higher, near 0.8550. A confirmation from the daily chart for the bullish outlook, would be the RSI reading breaking above 60, which would reflect a loss of bearish momentum.
Fan Yang CMT is a forex trader, analyst, educator and main contributor for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.
