EUR/GBP: Ready To Hit New Monthly Highs
Alpari Research & Analysis | May 25, 2017 06:42AM ET
The last few days were challenging for the traders on the GBP. Now, at the end of the week, it looks like the situation has finally stabilized and the overall sentiment on the EUR/GBP seems to be bullish. Our view is strongly supported by the interesting technical situation on the chart.
First of all, what we have here is a bullish breakout of the long-term down trendline (black). If we look a bit closer into that we would notice that traders made the first attempt to do that on Tuesday but it resulted with a shooting star on a daily chart. That could have been perceived as strongly negative but as we can see, it was finally ignored, which at the end of the day became an additional positive sign here. In addition to that, the price defended the mid-term up trendline (blue) and a horizontal support on the 0.8610. So currently, the price is above the three major supports and is on a good way to start a new long-term up trend. Furthermore, the technical analysis is supported by the fundamentals, the worse UK GDP in particular.
These are the factors that allow us to think that the sentiment on this instrument is bullish. Our view will be denied once the price will manage to come back below the 0.8610 but chances for that are now limited.
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