Home EUR/GBP Broke Downtrend Resistance

EUR/GBP Broke Downtrend Resistance

EUR/GBP made a strong move upwards, and broke resistance on the daily chart. Terrible Manufacturing Production in Britain pushed the Pound lower, while other currencies gained against the greenback. Parity now?

Yesterday’s bad banking news from Britain pounded the pound. This was especially seen in the GBP/USD currency pair, as the Pound fell below 1.40, then below resistance at 1.3960, and from there it was free falling to the low 1.37s before retracting.

A break was made also against the Euro: EUR/GBP went above the 90 mark it was flirting with for a long time and was in a sight distance of 92 before calming down.

Yesterday, the US dollar made gains across the board (strongest against the pound). Today the trend is different: USD/JPY fell below 98, and EUR/USD broke the range and is now trading above 1.28.

But the British Pound was left behind.

Also the Pound made modest gains against the dollar, with GBP/USD at 1.3886, but this wasn’t enough.  Manufacturing Production in Britain fell much more than expected – 2.9% instead of 1.5% that was expected. Almost double!

So, EUR/GBP gained from it, and made another move forward. EUR/GBP is now trading at 0.9230. After breaking the resistance line (shown in the graph, the next resistance is at 95 – which was the high point in January 26th. This point forms the downtrend resistance now broken.

eur/gbp breaking downtrend resistance

EUR/GBP Parity was so close at the beginning of the year, but then the currencies drifted apart, going as low as 0.8673 on February 10th, when parity didn’t seem near.

Now, the road to parity in the EUR/GBP seems closer.

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.