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EUR/GBP ends week higher but far from highs

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 12, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    EUR/GBP is about to post the third weekly gain in a row as it continues to rally from multi-year lows. But on the negative side for the euro, the close is likely to be far from the highs.

    On Thursday, a strong euro pushed the pair sharply to the upside and reached at 0.7897 a 1-year high. But shortly afterwards it started to retreat. Today EUR/GBP continue to move on a corrective mode and dropped further.

    During the American session bottomed at 0.7744 and then bounced modestly to the upside, unable to rise back above 0.7800. Near the end of the week is trading slightly above 0.7750, 150 pips below yesterday’s highs, but 0.85% higher from the level it had seven days ago.

    EUR/GBP outlook

    The main trend continues to favor the euro over the pound from a technical perspective. But the sharp retreat from the highs could signal that the pair has reached a temporal peak.

    But on the positive side for the euro, EUR/GBP so far is holding above 0.7720 - 0.7750 that could be seen as an important support and while above, the chances for a continuation of the rally remain in place. The pair needs to rise above 0.7850 to regain strength and momentum. Above, 0.7900 and 0.8000 are the next key resistance levels.
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