EURGBP Testing 2019 Lows
EUR/USD has been down 8 of the last 9 trading days, and the 1 day it closed higher, it was only up 4 pips! Once the pair broke the neckline of the head and shoulders pattern last week, if was off to the races. Price has traded from 1.1094 down to today’s lows near 1.0834, which hasn’t been seen since May 2017.
Source: Tradingview, FOREX.com
Since election day on December 13th, 2019, GBP/USD has been trading in a symmetrical triangle. Price hadn’t done too much until last week when it tried to break lower from near the apex of the triangle, only to have that be a false breakdown and trade back into the apex today. Prime Minister Boris Johnson replaced Finance Minister Sajid David with Rishi Sunak, who traders believe will be more likely to induce more fiscal stimulus into the economy. This caused GBP/USD to go bid.
Source: Tradingview, FOREX.com
With today’s price action in the Euro (lower) and Pound (higher), it seems logical that the next pair one would look at would be EUR/GBP, which is down almost 1% on the day. Technically, the pair has been trading nicely since August 2019, completing a flag pattern (blue) and almost reaching target (close enough for horseshoes) of a pennant pattern (orange). EUR/GBP reached a low of .8275 on UK election day, which was the low of the year for the pair. Price then bounced. However, with the Euro lower and the Pound stronger today, price is nearing the election lows once again. Price is currently trading near .8305. The first support for EUR/GBP is the .8275 level. Below that is the 127.2% Fibonacci extension level from the lows of May 8th, 2019 to the highs on August 12th, 2019 which is .8248. And although the previous mentioned pennant was almost reached, it once again is on our radar near .8165.
Below that, we have to zoom out to a weekly chart as EUR/GBP would be trading at 2016 levels. There is horizontal support and the 50% retracement level from the July 2015 lows to the summer 2019 highs, near .8115. Although that level is 200 pips lower, if price does reach it, there are likely to be strong buyers with ahead of that level with stops building below it.
Source: Tradingview, FOREX.com
First resistance isn’t until near .8390, however notice on the 240-minute chart how the RSI in below 20, in extremely oversold territory. Price may bounce for the RSI to unwind. Above there, the next level of resistance is near .8435. The ultimate resistance though isn’t until the 2020 highs near .8595.
Source: Tradingview, FOREX.com
Although EUR/GBP appears to be heading lower, the short-term RSI allows for the opportunity to bounce first. However, given that EUR/USD has closed near the lows of the day today (again), we can expect sellers to be looking for any bounce to take advantage and push price lower.
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
Contracts for Difference (CFDs) are not available to US residents.
FOREX.com is a trading name of GAIN Capital - FOREX.com Canada Limited, 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA is a member of the Canadian Investment Regulatory Organization and Member of the Canadian Investor Protection Fund. GAIN Capital – FOREX.com Canada Limited is a wholly-owned subsidiary of Stonex Group Inc.
Complaints are taken very seriously at FOREX.com. You can view our complaints procedure here.
© FOREX.COM 2025