EUR/GBP Awaiting Triangle Breakout

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EUR/GBP Awaiting Triangle Breakout

The EUR/GBP recently completed a double top, or at least broke below a consolidation range. Either way you look at it, it is showing signs of bearish continuation. Let’s look at the price action since the breakout.

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The 4H chart shows a break below 0.7222, consolidation range support. This was accompanied by price crossing under the cluster of 200-, 100-, and 50-period SMAs. So far, price is still under them, and thus maintaining the bearish bias created by the breakout.

We can see that price extended to 0.7152, but started to coil in a triangle. As we enter the 4/17 US session, the pair has respected the triangle resistance and is poised to test the triangle support around 0.7180.

The daily chart shows EUR/GBP trading under the 200-, 100-, and 50-day SMAs and with the RSI holding under 60 after the March rally. This reflects maintenance of the bearish bias and momentum.

If we have a break below 0.7180, the pressure will first be on the support/resistance pivot in the 0.7090-0.71 area, then the low on the year at 0.7014.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.