EUR/GBP posts eighth consecutive weekly gain

January 17, 2016

The euro finished the week among the top performers in the currency market boosted by risk aversion; the pound, on the other side, dropped sharply amid fears of Brexit and a slowdown in the UK economy.

EUR/GBP rose more than 300 pips since the beginning of the year and it has broken an important resistance around 0.7450. Despite overbought readings in every technical indicator, the pair continues to show strength.

On Friday, the rally stopped slightly below 0.7700. It peaked at 0.7694, the highest level since January 2015. Above 0.7700, the next long-term resistance is located around 0.7800/0.7750 (2012 low / Sep 2014 low). To the downside, the 0.7400/0.7450 zone has now become a support to watch.

The euro also finished higher ageist the Swiss franc and the US dollar. EUR/CHF rose almost 75 pips during the week. It peaked at 1.0981, the highest level since September, but then pulled back to end the week around 1.0925/30. EUR/USD rose over the week but failed to break above 1.1000.
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