Forex Technical Update

Previous: EUR/GBP Breaks 2010 Low; 0.77 in Sight (5/8)



As the Euro falls on the weight of uncertainty, the GBP is resilient and treated like a safe haven. This has translated to the EUR/GBP falling below the 0.80 handle. The 4H chart shows a market in a persistently bearish trend, as the moving averages are aligned with longer periods above the shorter periods. The distances between them are spreading apart as well, showing no signs of slowing down. Also the RSI continues to be held below 60 and continues to tag 30, reflecting persistent bearish momentum.

The next support is the 0.79 handle, but the key support is around the 0.77 area, which was the lowest support pivot in 2008 March - Nov. consolidation period.

The next risk event for the Euro is the 5:00AM EDT German and Eurozone Zew Economic Sentiment data, and according to ForexFactory both expected to drop from the previous reading.

We do also have a meeting among EU finance ministers in Brussels. The market wants to monitor how the new socialist French president Hollande will address austerity measures.

From the GBP side, Wednesday's Bank of England quarterly inflation report and BoE governor Mervyn King's press conference will be key to whether the GBP can continue to be resilient.

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Fan Yang CMT is a 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 and IBTrade 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.