GBP vs EUR and USD: strategic look
Brexit is stalled, but both the EU and the UK express hopes for a successful resolution. These hopes recently sparked an aggressive spike the GBP went on against the EUR and the USD. What’s the technical outlook?
GBP/USD
As surprising as it may sound, those strong moves don’t introduce any change into the existing trends. On a daily chart below, the last large green candlestick is exactly the rise of GBP/USD on Wednesday. The move was really big and doesn’t even have a similar one in magnitude on this panorama. But tactically, it falls well into the uptrend that has been in the place since the middle of September. From below 1.30, GBP/USD rose above 1.31. Most probably, it will go into bearish correction above 1.30 to eventually reverse and rise back above 1.31 on the other side of the uptrend.
EUR/GBP
Pretty much the same applies to EUR/GBP. After hanging above 0.9040, it plunged down to almost 0.9000. Tactically, that’s just another wave in in a local downtrend that has been in the place since the middle of September. A large one though – you can see that last long red candlestick between 0.9150 and 0.9000. Strategically, that downtrend itself is just another wave in a larger gradual uptrend that’s visible all across the chart. So the observers are right to say that Brexit is merely a local episode for the UK economy – the fundamental factors is what matters.
