Technical outlook for the GBP to EUR exchange rate: Go short on the breaking of 0.8315 for EURGBP say RBS

Tuesday, 06 March 2012 13:47

The GBP to EUR exchange rate is currently just 0.02% higher at 1.2008. The EUR to GBP is at 0.8322.

In a technical note on the EUR-GBP, RBS say:

"Go short on the breaking of 0.8315 and target 0.8280 onto 0.8223 stopping through the 5 day standard MA.

"Pressure builds on the trend line composed by the 2012 lows so far and the bias is for this cross to break lower once the stubborn support at 0.8315 has been broken.

"Stops look to building below here and this should be the trigger for moves lower to 0.8280 even back to the lows at 0.8223 which is the golden projection of the December 2011 sell off and the 2012 so far….

"So when the 0.8315 level is broken keep stops tight on a close above the 5 day moving average in anticipation for this to be a compulsive move. Bar the spike out at the end of March technically we are still in an almost perfect triangle continuation pattern!"

In the long term RBS think there is good risk return here for a longer term short position with stop losses through 0.8520 targeting .8286 onto 0.8192 onto 0.8069.

Do not forget the longer term trend is bias and that there is pressure building in this period of consolidation which looks to be released in the same direction the market entered it; south.