New analysis of EUR/GBP, GBP/USD and GBP/JPY
I have avoided trading the British pound pairs recently due to the implications of the volatile Brexit situation. I was concerned that technical analysis would be less reliable as the currency was pushed and pulled by political uncertainty. However, maybe it is time to look again and see if there are any opportunities.
EUR/GBP has traded sideways in an erratic pattern for almost two months after a decline from a peak of 0.9109 right at the beginning of January.
The upper trendline of the small rising triangle being formed this month is offering resistance at 0.8655. A break above 0.8660 therefore opens the door to the upper Bollinger band at 0.8679/80, then resistance at the March high and 38.2% Fibonacci level of 0.8713/.08722. A break higher again targets 0.8740/42 and 0.8749/50.
The best support level I can find is at 0.8625/20. A break below 0.8610 therefore is seen as a short-term sell signal targeting minor support at 0.8590/85, perhaps as far as 0.8558/55.
GBP/USD has been trading in a narrowing pennant formation for the last five weeks as you can seen in the chart below. Be ready for the breakout!
We have upper trendline resistance at 1.3115/25 so a break above 1.3135 is a short-term buy signal targeting 1.3160/65, then 1.3195/99. Expect strong resistance at 1.3225/35 but short positions need stops above 1.3260.
There is minor support at 1.3085/75 but a move below 1.3065 risks a re-test of the lower trendline support at 1.2990/80. Long positions need stops below 1.2960. The next target is the 100-day moving average at 1.2950/45, then 1.2910/00.
GBP/JPY has beaten resistance at the one-month upper trendline of the triangle pattern at 146.10/20, so this is now support. Holding above here allows a recovery to last week’s high at 147.01 then the April high so far at 147.17. A break higher targets 147.40/50, then 147.80/90.
The first support is at 146.20/10 but a move below here targets 145.75/70 and 145.35/30, before important support at 144.85/75. Long positions need stops below 144.50.
Technical Analyst & Trader
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