The $EURGBP has made new highs to 0.8117 after a four-month rally. Though this month could mark a fifth month, the rally might have finally reached a point of exhaustion. There is a very similar example of price action during the very beginnings of the financial crisis in 2007. A sharp move to the upside found resistance at 0.8100 and corrected as low as the 0.7700-support level. The next six months were spent rangebound in the zone between 0.7940 and 0.7860. This support zone also held up price action in 2014. During its descent in 2014, the $EURGBP loosely found support between the 0.7940 level and the 0.7860 level. Day-to-day price action was very choppy at that time too. There is good reason to believe this trend may see the start of consolidation last week. That might have been the end of consolidation too. Price has managed to find support at the 0.7940-support level, which is also the top of the support zone. While the move to new highs broke above the 0.8100-resistance level, the $EURGBP has already consolidated 38.2% of the last bullish wave of the rally. As a Fibonacci move on the $EURGBP, this is very bullish price action and signals a resumption of the rally in the new trading week.
Premium trade setups with targets and stops are published in the EUR/GBP Outlook for the Week in Volume 59, this week’s Quid Report.