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Thomson Reuters
Aug 31 - 02:36 AM
EUR/GBP - COMMENT-EUR/GBP Close Pivotal - A Consensus Trade In Peril
First appeared on eFXplus on Aug 31 - 12:50 AM

EUR/GBP has been in a well-defined rising trend channel since mid-May, and after a false topside break on Tuesday, the 0.8945 channel base is in view today.
The major factors behind the fall were chief EU negotiator Barnier opening the door to a soft Brexit on Wednesday nL8N1VK50X, a round of euro zone peripheral yield pressure yesterday and the UK parliament being closed for the summer break, causing domestic political infighting to slip off the radar.
Technically daily momentum studies are bearish, while 5, 10 and 21 DMAs conflict, which is a neutral setup.
EUR/GBP ended yesterday below the 21 DMA, which has provided underlying support since signals began trending in mid-June.
This is a bearish sign and a weekly close below the 0.8945 trend channel support would be a pivotal signal for next week, with initial support at 0.8915, 38.2 percent of the April-August rise.
Long EUR/GBP has been a popular trade for excellent reasons, as uncertainty dominated the UK government and Brexit negotiations, but could the cross join the long list of consensus trades to fail in 2018?

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