The EUR/GBP swing high resistance obviously wasn’t enough to keep the pair capped, but I wanted to take the opportunity today to discuss why I see a zone rather than a hard level in this particular forex currency pair.
EUR/GBP Daily:
Price is hugging the top of that bullish channel, which is the obvious area of resistance on the EUR/GBP daily chart. But as you can see here, there’s also quite the large horizontal resistance zone with no real clear top to draw a single line from.
As you well know, each forex currency pair has a personality all of its own. In my opinion, EUR/GBP just isn’t the type of pair that touches support/resistance and then immediately moves away. Like all pairs, it respects major levels, but it consolidates in a lot of sideways price action before moving off or through them.
Now just look back at the 2016 spikes that my horizontal resistance levels have tried to be drawn off and look at the price action at that time. Like I said above, there is definitely a level there, but the sideways choppy price action makes it much more of a zone. What a zone at that!
For me, that channel resistance inside a huge resistance zone just isn’t clear enough to cleanly be able to trade the level. The best bet here is to wait and see what sort of reversal pattern that the charts print in here and then zoom in and look for short term support turned resistance to possibly short off.
