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EUR/GBP Technical Analysis & Daily Chart

Published on: 12/01/2017

Since the beginning of the current week the price of the EUR/GBP currency pair has risen by slightly more than 200 points and has stoped close to the resistance level at 0.8700.

On Wednesday an inverted hammer reversal pattern was formed on the chart and it is quite a significant signal for the presence of a trend.

For the Euro in the global market we can note that the price of this currency increases in relation to all the main quotes. Nevertheless now we see a pause in the growth and soon we expect a correction against the general uptrend.

Recently the price already approached the level of resistance at 0.8700 several times. Both times it was an insurmountable wall for the currency pair and the price could not break it.

Comparing the Stochastic indicator chart with the price graph we can see a clear divergence which was formed last Friday. This trading signal on the daily chart and with a rising market is a strong signal to sell the Euro that cannot be ignored.
The signal lines of the Stochastic indicator have been crossed, which demonstrates a clear buy signal.

The Next Few Days

Considering the overall situation on the market for the Euro and price's proximity to a significant resistance level at 0.8700, as well as the presence of a divergence on the graph, we have all the signals for the opening of sells for the EUR/GBP.
The general trend is still increasing but today there is a most favorable situation to play on the rollback of the price.

During this week we are likely to see a decrease to at least 0.8575 or even further to 0.8500.

We recommend opening sell positions on the EUR/GBP if the price goes below 0.8650 with target points for profit taking at 0.8575. S/L orders need to be set up at 30-50 points above the entry point.

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