Fade rallies in EURGBP

Bearish sentiment still dominates EURGBP and the currency pair is likely to re-test the 2015 lows, according to George Davis, Chief FIC Technical Analyst at RBC Capital Markets.

Davis expects the support trendline at 0.7070 to be tested and eventually give way, exposing the 2015 lows between 0.7014 and 0.7055. He says a daily close below 0.7014 would be “an extremely bearish development”, which would shift the focus down to 0.6960.

Any rallies to resistance at 0.7339 and 0.7483 are expected to attract renewed selling interest based on the bearish backdrop.

See chart.