By: Mike Kulej
In spite of good size price swings over the last couple of weeks, the EUR-GBP is still not showing a discernable trend on a long-term chart. This pair is in a process of building a huge symmetrical triangle, under development for over two years now.
During the record setting bullish trend in 2008, the Euro came close to parity with the British Pound, reaching a high of 0.9801. At that time, nobody was predicting the Euro crisis and calls for the EUR-GBP heading even higher dominated the Forex world.
Since then, though, this pair has been drifting lower, but within the last major upswing, between 0.7692 and 0.9801. This is a clear consolidation in technical terms, which is not predictive of the next main trend. The direction of the breakout from the triangle will provide the first indication of the likely next long-term price swing.
Considering where the price is located in relation to the apex of the triangle, one could expect a more decisive move in the EUR-GBP within weeks. That should be confirmed by an increased activity in indicators like the ADX and the MACD. Both of them are neutral at present and this has to change for a lasting new trend to develop.