Forex Technical Update

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EUR/GBP 4H Chart 7/19/2012 3:00PM EDT

eurgbp07192012

The EUR/GBP finally broke below a short-term range formed since Monday (7/16). The 4H chart shows a strong breakout candle during early part of the 7/19 US session, after which the market hit 0.7790 and is in a pullback so far as we wind down the 7/19 session.

The previous consolidation support at 0.7830 should be monitored for resistance for this pullback. A break above 0.7850 will probably break above the lower part of the channel, exposing the upper channel resistance, which means it is still within the context of the bearish trend. A break above 0.79 would probably break the larger declining channel in the 4H chart.

Note in the Daily chart that not only is the EUR/GBP closing in on the declining channel support from the 4H chart but it is already tagging a larger channel support that goes back to July 2011. It should also be noted that 0.77 is a key level to monitor as it is the support for a consolidation that occurred through much of 2008.

This means the bearish outlook should start to be limited, but the bullish outlook should probably be shelved until EUR/GBP nears 0.77.

EUR/GBP Daily chart 7/19/2012 3:00PM EDT

EUR/GBP

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.

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