Whilst EUR/GBP broke through the initial resistance zone, it now approaches an area of technical levels which may provide a better price to get short on the clearly established downtrend.
Tonight sees data from both UK and Eurozone, including a speech by BoE Carney. If UK CPI disappoints and / or we see a Dovish tine from Carney, then we can expect EUR/GBP to trade closer to 0.80 (Which may provide shorting opportunities further along in the week). Of course better-than-expected sentiment from Eurozone and Germany also would help.
However, should CPI see a good number then we may see a small retracement today, which could generate a sell signal. Whilst the day to day news will obviously have implications to the near-term prices, technically EUR/GBP remains in a clear downtrend and the economies continue to diverge, which favours further downside for EUR/GBP over the coming months.
Price now hovers around several technical resistance levels which may provide a sell-signal over the coming day/s.
- Yesterday's high was capped by the 21eMA
- We sit between the 50% and 61.8% retracement levels
- Just above here is the upper bearish channel
- Above the bearish channel is the 0.80 level