Trade of the Day: EUR/GBP

By: Dima Chernovolov

EUR/GBP continues to rise after the earlier breakout of the key resistance level 0.9143, which was previously identified by Autochartist. Autochartist rates the significance of key resistance level at the 4-bar level – which is the result of the 4 previous price reversals from this price level. EUR/GBP is expected to rise further toward the forecast price 0.9226 – in line with the earlier breakout of the resistance zone shown below.

As can be seen from the daily EUR/GBP chart below, the pair previously broke above the resistance zone lying between the key resistance level 0.9150 (former double top from October) and the 61.8% Fibonacci correction of the downward correction from September. This price area is acting as the strong support area after it was broken. The proximity of this support area and the strength of the bearish sterling sentiment increase the probability EUR/GBP will continue to rise toward the forecast price 0.9226.