For months, the Euro has rallied against the Pound. Since mid November of 2015, the single currency has gained nearly 1,000 pips against its British counterpart; an impressive feat for a pair that is lucky to see a 100-pip range in a single day.
However, the last 24 hours of trading is signaling that the current rally may be running out of steam as the pair struggles to catch a bid at the 0.7754 confluent support level. This area is the intersection of the January high and the trend line that extends off the December 2015 low.
While the trend line shown in the chart below hasn’t seen a ton of action since its inception, the 0.7754 handle does appear to be the proverbial line in the sand between the bulls and bears. As such, a daily close below this area could spell trouble for longs.
Should losses extend beyond today’s session, the first area of support lies between 0.7490 and 0.7525. A failure at this area would expose trend line support that extends off the January 2016 high. More on this later if and when a further push lower materializes.