Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Executive Summary:
- A bearish EURGBP cycle has dominated this year as the cross weakens within a broad range.
- This range is defined by its peak at 0.9300 and a base at the 0.8300 handle.
- The cross last traded at the top of the range in 2020 and as is typical with ranges, the trend since has been down.
EURGBP peaked at 0.9501 on Mar 19, 2020. This rally represented a temporary break of a major resistance at the 0.9300 level. The cross has been trading in a broad 0.9300 - 0.8300 range since July 2016 and the range continues to highlight the broad upper and lower boundaries of a multi-year sideways trend.
Since the peak in March 2020, EURGBP has traded in a bear cycle, retreating from the upper band of its range. At current levels (0.8435), price is approaching the base of the range. The 0.8300 level provided support in 2016, 2017, 2019 and 2020. As the cross nears the 0.8300 handle it would not be a surprise to see demand increase, given the historical performance of 0.8300 as a support. If 0.8300 holds, this would suggest potential for a medium/longer-term bull cycle towards the top of the range at 0.9300.
Alternatively, a confirmed bearish breakout of the range would represent a major technical development and strengthen a bearish case both from a short-term and medium-term perspective. Current trend conditions are clearly bearish given the extent of this year's downleg. A range breakout would reinforce current conditions that are also clearly highlighted by the moving average studies applied to the point and figure chart.
Watch 0.8300!
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.