This pair, once it starts moving, tends to keep going in one direction and can really over-stretch at times. The bears are in charge now after the break below .8400 and the danger would seem to be to the downside. There is still the spectre of the Gilt market hanging over the pound’s future but for the moment at least, that has been forgotten. Elsewhere on the crosses, GBP/AUD looks to be reversing its huge downtrend.
Important technical levels to watch in EUR/GBP are:
- .8165; 50% retracement of .6535/.9795 rally and also a series of prior highs
- .7886; 200-week MA
- .7780; 61.8% of above mentioned big rally plus a series of weekly lows.
