By: Mike Kulej
While not grabbing any headlines, the EUR-GBP pair has been in a nice uptrend. Since the beginning of 2011, the price advanced from 0.8282 to 0.8936. It is a good size rally for this pair, especially if one considers the large pip value here.
The past couple of weeks, though, brought a slowdown in the price movement. Very little progress was made; most of the action can be classified as a consolidation. As the EUR-GBP is getting closer to 0.8940 (an earlier high), it is clear that this level is going to provide a strong resistance.
Currently the EUR-GBP is contained between that resistance and a trendline, which provides support here. The price behavior is very indecisive, offering no clues about the next course of action. We can see how lifeless the Momentum Indicator has become, drifting into the neutral zone. No help here.
The EUR-GBP could break above the resistance for another bullish run, or pull back from the resistance, in which case the trendline will give way. It is probably better to wait for one of these lines to give way as an indication of the next most likely direction, which should happen relatively soon.