Weekly FX Review - 18 October
EUR/GBP - Monthly
After spending a few weeks looking at the recent volatility in the GBP/USD, this week we take a look at the EUR/GBP. First we review the monthly chart to show the long-term trading range.
After lows of 0.700 posted back in 2015, price action has spent much of the past 15 years trading in a broad range between 0.825-0.950, with the last retest towards the lower end of this range earlier this year.
But what about on a tighter timescale?
EUR/GBP - Weekly
The weekly chart details the recovery from these 2022 lows, and how price action was attempting to post a move back towards the 0.9500 area. Let’s move in closer…
EUR/GBP - Daily
The daily chart shows how after the recent volatility based around the UK mini budget the price moved sharply higher up towards this key long-term resistance, only to fail.
From these volatile highs, the price action has since retraced and is now trading around the 61.8 percent retracement level. Moves much under 0.8700 would increase concerns that price action was due to fall back to the 2022 lows once again.
However, due to the medium-term trend shown on the weekly chart, which itself sits within the very well-established long-term trading range, expectations are building that the pair can rebuild interest back above 0.90 in the coming days
Some resistance could occur around the 0.8800 area, the 50 percent region, but it is more likely that substantial resistance may occur up at the 38.2 percent level around 0.891. This leaves some upside potential for the more active traders using the recent 0.800 lows as stop areas.