The Euro Edges Higher against the British Pound

EUR/GBP (0.8475)

Points to consider in this euro Forex market:

• The euro continues to inch higher against the British Pound.
• A break and daily close above 0.75 is needed for a full bullish market.
• There is initial support coming into focus near 0.8250.

The EUR/GBP Forex market continues to crawl higher as buyers are now focusing on a key pivot at 0.85. A daily close above this level to really bring about a full on rally higher. This level, 0.85 is supported by a trend line and the euro has twice been rejected at this level. A break above would indicate a bullish shift in our model. Please refer to the below daily MT 4 chart for today’s daily technical analysis.

Euro Technical Analysis

Let’s discuss today’s EUR/GBP daily technical analysis. A daily close above 0.85 will shift focus to the pre Brexit highs at 0.8625. The next layer of resistance comes in at 0.87, which was the high price point in 2013.

If this Forex market holds below 0.85, the euro would swing back lower towards the support layer at 0.8250. A break below the latter downside barrier sifts attention towards 0.81, at first, then the major downside barrier at the November 15 low at 0.80.

Trade Strategy

Let’s talk about today’s daily trade strategy. Right now the average trading range (ATR) is very narrow. This Forex market is also trading too close to a technical support level to warrant a long EUR buy at this time. A buy order would be premature from a risk to reward perspective. There are also no bearish reversal signs in the EUR/GBP Forex market. This makes a short EUR sale, in line with my bearish EUR forecast for 2016 premature.

Taking all of this into account, I will opt to stand aside and remain flat in this particular forex market.