Euro spikes higher against the British Pound

The euro, in the EUR/GBP Forex market, spiked higher following the first round of France’s 4presidential election. Price action is now retesting the trend line support-turned-resistance. The 4 break, last week completed a large head-and shoulders chart patter. This is seen on the below MT 4 chart.

It should be noted that a lot of tension from the French election remains in place. Nothing has been decided and volatility will remain in place for now.

Euro Technical Analysis

Let’s first discuss today’s daily euro technical analysis against the Sterling Dollar. A daily close above March 31 low, also the aforementioned trend line resistance level at 0.8480, challenges the next upside barrier that lines up at the March 23 low. This technical resistance is at 0.8605.

The alternative technical analysis notes the first layer of technical support lining up at the February 22 low. This downside barrier lines up at 0.8402. The next level of technical support lines up at a double bottom. This level of technical support can be found at 0.8335.

Trade Strategy

Okay, this is fun. The post-election rally triggered a short EUR sale. However, the gap caused the sale not to come in at 0.8430 but was executed at 0.8498. This means I needed to adjust the first target to 0.8402. The initial stop loss is set to trigger on daily close back above 0.8480. Should the trade meet the first objective, half the profits will be booked and the stop loss will be trailed to break even.