Brexit weakened GBP
Starting from November 2015 EURGBP moves in an upward trend respecting bullish trend line. The weakening of GBP is influenced by June ’16 British decision of leaving European Union. Currently, for the fundamental reason there is no indication that this trend can change.
The upward trend on the EURGBP
In last year EURGBP increased from 0.7310 (January 2016) up to 0.9300 (October 2016). In last week price has tested the growing trend line and there appeared expected rebound and continuation of growth. Demand immediate goal is 0.8640. After breaking this level the key is to break the resistance area of 0.8850 – 0.8880
Alternatively only breaking the upward trend line would signal a change in the current trend. In addition, it would mean breaking the neckline of formation of H&S, which is formed on the chart since July 2016 (Figure D1) what would accelerate declines.
