EUR/GBP Technical Analysis: Just a Matter of Time
In the past five days, the EUR/GBP pair has fallen from a high of 0.8926 to a low of 0.8806 as shown below.
Since then, the pair has been going back and forth, trying to establish weak support and resistance points between the 0.8834 and the 0.8806 level.
The pair seems to have found a solid support level and is expected to go up as buyers consolidate. As I have mentioned before, I expect the political issues in the United Kingdom to potentially weigh down the pound while the exciting economic growth and optimism in the euro area to act as a catalyst for growth.
The likely scenario is where the pair starts a new upward trend. Long traders may set take profit at the 38.2% Fibonacci retracement level of 0.8851 and another one at the 50% level of 0.8865.
In the unlikely event that the pair breaks the current support, then we may expect more downside pressures as the pair tries to find another support. Possibly, we can see the pair drop to – or near – the one-month low of 0.8683.