EURGBP Forecast: G7 and Brexit Talks may trigger the volatility
Last week, we had a fundamental triangle pattern that helped Sterling’s recovery. “Johnson, Merkel, Macron triangle ” and rising hopes for a better Brexit deal helped GBP to gain ground against all major currencies.
The G7 leaders’ summit in France over the weekend might offer something of a lead for the week ahead.
According to the Reuters; British Prime Minister Boris Johnson is expected to tell European Council head Donald Tusk that the UK will only pay 9 billion pounds ($11 billion) instead of the 39 billion pound ($47.88 billion) liability agreed by former Prime Minister Theresa May under a no-deal Brexit, Sky News reported early on Sunday. Full Text: Johnson to tell EU’s Tusk UK won’t pay £39 billion under no-deal Brexit: Sky News
It is obvious that a less painful Brexit would help both the UK and EU economies.
When we look at the subject in terms of EURGBP currency pair, any positive development in the Brexit process is likely to help Sterling which is very cheap in Real Currency Strength basis.
As seen on the H4 chart, the pair dropped 60 pips after completing Head&Shoulders pattern. EURGBP entered a correction process that was supported by the U.S-China trade war and tested the broken neck-line.
The neckline at 0.90900 worked well as resistance and the pair headed South. Apart from the fundamentals, we predict the price is likely to continue its bearish move.
The breakout of 0.90300 would accelerate the bearish trend. If the pair breaks below 0.90300, it is likely to test 0.90000 and 0.89750 levels.
Closing above 0.91000 would change the near term direction of the pair. In this case, Bulls will target 0.91200 and 0.91420. We have two bearish harmonic patterns that can be used as selling opportunities.
Conclusion: We keep our short positions and plan to add at the breakout of 0.90300 support
We have posted the chart and the bearish patterns. Entry notification with details would be sent if the patterns became validated.
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DISCLAIMER: This is a technical analysis study, not advice or recommendation to invest money
EURGBP Forecast: Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. Chartreaderpro does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility