EUR/GBP Price Forecast: Returns to comfort of the range

EUR/GBP has returned to the range it has been trading in since the end of September.
It will probably continue oscillating there until it breaks out either higher or lower.
The false downside break at the start of November, suggests the range floor may be vulnerable.

Joaquin Monfort FXStreet

EUR/GBP continues trading in a range. The pair is probably now in a sideways trend and given the principle of technical analysis that “the trend is your friend” it will probably continue oscillating until it makes a decisive breakout one way or another.

EUR/GBP 4-hour Chart

The pair made a false break on November 8 when it fell to a two-and-a-half year low of 0.8260. However, rather than continuing down to the target generated from the range, EUR/GBP recovered back inside where it now trades.

Because it is in a sideways trend, however, the odds favor a continuation sideways, which suggests the possibility of a recovery from the current level near the range floor, and the unfolding of a leg up towards the ceiling at around 0.8450.

It is too early to say with any confidence whether EUR/GBP will indeed rise up to the top of the range. Further, the false break may be a sign of weakness and be followed by another break lower, thus complicating the picture and adding a bearish tone to the chart.

Assuming a break lower, it is possible the pair could fall to the target established by the range, at 0.8219 – the 61.8% Fibonacci extension.

Author

Joaquin Monfort

FXStreet

Joaquin Monfort is a financial writer and analyst with over 10 years experience writing about financial markets and alt data. He holds a degree in Anthropology from London University and a Diploma in Technical analysis.

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