EUR/GBP – Respecting Multi-Month Boundaries

EUR/GBP – Multi-Month Range Remains Intact

Learn how to range trade with our complimentary guide

*** UPDATE ***

EUR/GBP is closing in on multi-month support and traders should be aware of the multiple attempts to break lower. Traders should look for a reaction higher before considering any trade. A confirmed break of support will leave 0.8500 as the next level for traders to watch.

EUR/GBP Daily Price Chart

Original Article from January 3, 2024

EUR/GBP remains a pair for range traders with the body of the rough 0.8500 to 0.8765 range solidly in place for a few months. The CCI indicator at the bottom of the chart has been effective, showing oversold and overbought conditions, and while it is a lagging indicator it has been timely in highlighting a range trend change. The current price is nearing the middle of the recent range, suggesting a neutral approach to the pair, but if all three simple moving averages are broken then the move lower looks set to continue. Range traders should wait until the price closes in on the 0.8549 horizontal support nears and then check the CCI indicator for its current reading. A long position here should be used with a stop loss at the lower support at 0.8494. Conversely, a move higher to 0.8715 may offer an opportunity to open a short position with a stop loss at the multi-month range high of 0.8766.

EUR/GBP Daily Price Chart

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Charts Using TradingView

IG retail trader data shows 48.22% of traders are net-long with the ratio of traders short to long at 1.07 to 1.The number of traders net-long is 0.35% lower than yesterday and 4.41% higher than last week, while the number of traders net-short is 10.11% higher than yesterday and 9.71% higher than last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/GBPprices may continue to rise.

To see what this means for EUR/GBP, you can download the full report below

What is your view on EUR/GBP – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.