The EURGBP, like the other EURO denominated pairs opened the week with a bullish gap. The 150 pip gap was due to the victory of Emmanuel Macron over Le Pen during the first round of the presidential votes. However, since then, price has moved within a very thin trading range. Are we finally going to get a breakout and a further dip? Will the key level support hold once again? Will the gap created close? A EURGBP Harmonic Analysis will show what possibilities lie ahead.
26 April, AtoZForex – Both the Euro and the pound have begun the week fairly strongly. Among the majors, the EURO, GBP, CHF and USD have been the better performers while the AUD, CAD, NZD an JPY have done poorly this week.
This is probably why the EURGBP has only moved within a narrow 80 pip range from top to bottom this week so far. Interestingly, price just completed a bullish harmonic pattern.
The bullish Gartley pattern completed last week at the 0.8300 psychological support. Since then, price has bounced 185 pips. On May 23, if Emmanuel Macron eventually wins the election, the Euro is expected to rally.
However, with a strong GBP, the rally is expected to be limited as the 0.8650 resistance should keep bulls at bay. The gap created may close soon and the 0.8300 support will be tested once again.
EURGBP has kept creating lower highs since the October 2 flash crash. The 0.8650 resistance level should be a good level to short the pair. However, the 0.8300 level may not give in easily. That level has been tested for 8 months and has supported price from a further decline.
EURGBP Harmonic Analysis: Key levels and possible targets
The 0.8300 support level also doubles as the 0.38% support level from the 2015 low of 0.6931 to the 2016 high at 0.9268.
If price eventaully breaks the 0.8300 support, it may test the 0.7921 handle, 400 pips below current price. Below that level, a further strong support lies at 0.6900.
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