EUR / GBP TECHNICAL OUTLOOK:
- EUR / GBP has traded within the bear canal for the last five months
- The pair’s bias is negative, but a short-term technical setback may occur as soon as the price rises above the main support area
- In this article, we introduce the most important technical levels EUR/GBP
In the last five months, EUR / GBP (euro – pound sterling) has moved flawlessly within the decreasing channel, the technical pattern consists of two downwardly sloping parallel lines the upper trend line, which represents resistance and a lower it notes support.
With the sale that started last Wednesday, the price has fallen towards the lower limit of bear formation, close to 0.8510 / 0.8475. This zone can be considered strong technical support, especially like that is already acted as a floor in early April, bringing falling to a screaming stop and paving the way for a brief rally.
Although the medium-term bias of the EURGBP is clearly negative, as reflected a series of lower elevations, temporary repercussions should not be completely ruled out, given the proximity of the pair to accession aid. This situation can create opportunities for counter-trends and tactical traders who want to speculate on a possible reversal. This means that in the event of a setback, buyers could exchange rate towards the upper limit of the channel close to 0.8640 before the downward trend resumes.
Conversely, if the EUR / GBP falls lower and falls decisively below the 0.8500 / 0.8475 barrier, all bets will be eliminated. In this scenario, vendors may run high sell off able pushing price in the direction of 0.8385, followed by 2019/2020. the lowest in the 0.8275 region.
In principle, the euro / pound sterling appears to be more likely to fall. The ECB ‘s new inflation framework ensures that monetary policy is maintained loose for a long time time. In the meantime, the Bank of England could step down in the United Kingdom accommodation as soon as next month, given the strong economic performance and the decline in COVID-19 cases. In some ways, the monetary divergence can be seen as a rising catalyst for the pound sterling.
EUR / GBP TECHNICAL TABLE
TO CUSTOMER SENTIMENT DETAILS
IG’s retail data show that 76.36% of customers are net lengths and the ratio of long to short traders is 3.23-1. The latest report shows that traders are now in their net EUR / GBP since 13 July, when the pair traded close to 0.85. Moreover, the number of traders in net length is 13.08% higher than yesterday and 82.42% higher than last week, while the number of short traders is 17.63% lower than yesterday and 46.46% lower than last week. We usually view the contradictory situation of the crowd and the fact that traders are net long indicates a continuing decline in EUR / GBP prices.
EUR / GBP VS CUSTOMER PLACEMENT
EDUCATIONAL INSTRUMENTS FOR TRADE
– Written by DailyFX market strategist Diego Colman