EUR/GBP: Bulls Looking to Buy on Dips?
|As my colleague Fawad Razaqzada noted earlier today, the British pound has finally caught a small bid today after selling off sharply through the first three days of the week (see “Brexit-hit GBP/USD rebounds ahead of UK GDP and US CPI” for more). There is certainly some prospect of a bounce in GBP/USD, which is testing a critical long-term Fibonacci retracement, but we also wanted to a key make-or-break level for the recent rally in EUR/GBP.
Looking at the daily chart, EUR/GBP broke out to a fresh year-to-date high yesterday, eventually surging up to hit its highest level since last October near 0.9030 in this morning’s trade. That said, rates have now reversed to show a possible bearish “dark cloud cover” pattern in development, which could point to a near-term pullback. Such a move wouldn’t be particularly surprising, with the unit hitting the top of its 2-month bullish channel as well.
Technically speaking, the near-term horizontal levels to watch will be the Q4 2017 highs around 0.9030 and March’s previous-resistance-turned-
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