EUR/GBP – Buyers Now Set Crosshairs on 0.77 and Higher

Talking points to consider in this Forex market:

• The euro is now trading above 0.76 which suggests buyers are setting crosshairs on 0.77 and higher.
• Still waiting on a short euro sale in line with the overall bearish trend in this Forex market.
• Trade strategy: Stand aside

The EUR/GBP is continuing to inch higher as buyers set their crosshairs on 0.77 and higher. However, please note that the euro appears to be running out of steam as the RSI is now showing some negative downside convergence. Right now this Forex market seems to be eyeing fresh yearly highs, which have capped gains in the past.

Technical Analysis

Let’s talk about today’s daily EUR/GBP daily technical analysis. There is near term resistance lining up at 0.7707. A daily close above this level challenges the next topside barrier at 0.7820. The alternative EUR/GBP technical analysis, should the euro move back lower notes the first downside barrier at 0.7640. A break below this technical level challenges the next support barrier lining up at the January 22 low. This technical level is at 0.7525.

Trade Strategy

Let’s now discuss today’s daily EUR/GBP trade strategy. The fundamentals here, in this Forex market still favor a weak euro. This current upswing seems to be petering out but I have no confirmation of that. From a technical analysis, or risk to reward perspective, the average trading range (ATR) is too narrow to warrant a long or short euro trade at this time. Taking all of this into consideration, I will opt to stand aside and wait for a short euro trade in line with my bearish euro forecast. For today, I am flat in the EUR/GBP Forex market.

The ECB has an aggressive dovish monetary policy in place. They have committed to more monetary easing by March which makes the euro weaker. This is why I remain bearish euro.