- EUR/GBP Technical Strategy: Short at 0.8497
- Euro spiked higher after first round of French presidential election
- Short trade triggered just below 0.85, aiming for return toward 0.84
The Euro spiked dramatically higher against the British Pound following the results of first-rounding voting in the French presidential election. Prices are now retesting trend line support-turned-resistance whose break last week may have marked completion of a large Head and Shoulders topping pattern.
From here, a daily close above 0.8480 (trend line, March 31 low) opens the door for a test of support-turned-resistance at 0.8605, the March 23 low. Alternatively, a move back below the February 22 bottom at 0.8403 paves the way for a challenge of a double bottom at 0.8334.
The post-election spike triggered the short entry order established last week but the magnitude of the gap and thin liquidity in early-morning Asian trade resulted in significant slippage, putting the trade in at 0.8497 rather than the pre-set rate of 0.8431.
Accordingly, the first target will be revised to 0.8403. A stop-loss is set to activate on a daily close above 0.8518. Half of the trade will be booked and the stop moved to breakeven once the first objective is reached.