EUR/GBP – challenging trend line, Trap for bulls?
EUR/GBP rose to a high of 0.8314 after UK was voted out of EU by Britons. The sharp rally could turn out to be a trap for two reasons. One is explained here in the GBP/USD post.
The other one is related to Eurozone. The UK referendum outcome has clearly highlighted the growing frustration among locals about the EU set up. UK, despite all of its problems, is any time better than debt roiled Eurozone nations. This means, victory of ‘exit’ vote in UK could trigger wave of referendums across other European nations, mainly those which are part of the Eurozone.
If latest reports are to be believed, French and Dutch are talking about a similar referendum. This could be the time when the EUR/USD begins its move towards parity; a level which many have been anticipation since late 2014.
On monthly chart, we see the cross posted a high above the larger falling trend line hurdle.
However, the pair needs to see a month end closing above the trend line to signal trend reversal. A failure could actually signal a fresh bear move. The chart looks remarkably similar to the way EUR/USD monthly chart looked back in April 2014.
The other one is related to Eurozone. The UK referendum outcome has clearly highlighted the growing frustration among locals about the EU set up. UK, despite all of its problems, is any time better than debt roiled Eurozone nations. This means, victory of ‘exit’ vote in UK could trigger wave of referendums across other European nations, mainly those which are part of the Eurozone.
If latest reports are to be believed, French and Dutch are talking about a similar referendum. This could be the time when the EUR/USD begins its move towards parity; a level which many have been anticipation since late 2014.
On monthly chart, we see the cross posted a high above the larger falling trend line hurdle.
However, the pair needs to see a month end closing above the trend line to signal trend reversal. A failure could actually signal a fresh bear move. The chart looks remarkably similar to the way EUR/USD monthly chart looked back in April 2014.
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