I’m revisiting the popular EUR/GBP cross. In the last post about this currency pair, I wrote about it breaking the support line of 0.88, on February 5th.
After breaking that line, it stayed below Since then, it continued its decline, and reached a low point of 0.8640, on February 10th. But after hitting that low point, it began climbing. This climb escalated into a break, in the same day. It later passed the 0.90 mark, hitting a peak of 0.9072 on February 12th.
EUR/GBP Chart
And since then, it gradually declined, but the 0.88 line was “reinstated” as a support line.
Now, is it going to continue to be a “range pair” and trade a little above 0.88?
I look to my favorite blogs for some insights:
Kathy Lien, at FX360, suggests that fundamentals supports a fall of the pound while the Euro stays stable. So, EUR/GBP Parity is an option that can happen. On the other hand, she states that a technical analysis of the EUR/GBP pair indicates that “parity is not there yet”.
James Chen, at FX Path, wrote on February 10th that the pair reached a major resistance line. His diagonal line truly worked as a resistance line, and the pair bounced since then. His target resistance line, 0.9100 also worked – the pair stopped at 0.9072.
So, my conclusion from these insights, is that EUR/GBP is now trading in a narrow channel – the support channel is on the rise, and the resistance channel is falling. They’ll eventually meet, and when this happens, it will break from the range.
But after breaking the range, where will EUR/GBP go?