The previous EUR/GBP noted resistance at 0.81, coincident with a major declining trendline. The market indeed extended a retracement against the July – September rally. I mentioned an analogy with the previous bearish corrections that were followed by a bullish swing higher than the starting point of the correction. The projection was targeting 0.7960, where the EUR/GBP would meet some support factors. As we gear up fro the 9/21 US session, this scenario is about to be complete.
Support: The 0.7960 area is a previous pivot and almost coincident with a rising trendline, which is probably just below, near 0.7950. The 4H chart shows the market trading within a declining channel, accelerating a bit as we come to the last trading session this week. I would say at this point, only a break above the channel resistance, and above the 0.8020 pivot area would bring back the bullish outlook and refocus the EUR/GBP toward the 0.81 pivot for a breakout of a key trendline to the upside.
Bearish scenario: The RSI is showing lost of bullish momentum. A break below 0.7950, pushing the RSI to 30, might be initial signs that the EUR/GBP market is turning bearish in the medium-term, which would expose the 0.7755 2012-low.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.
Copyright FX Times All rights reserved.