Forex Technical Update
After breaking below the 2011 low at 0.8280, the EUR/GBP fell to 0.8220 before finding support for a recovery attempt. The corrective rally so far has tagged 38.2% retracement (of the 0.8370-0.8220 swing) at 0.8277. This basically coincides with the 0.8280 level, which is now looked at as resistance. The 1H chart shows a the RSI reading attempting to break 60. It had already done so, but failed to tag 70. If 70 is tagged in the 1/10 US session, we are likely going to see an extension of the correction.
The 4H chart shows the fibonacci retracement taken from a higher pivot at 0.8420 down to the same low at 0.8220. Note that the 38.2% retracement here matches up with the 50% retracement of the smaller swing, so the 0.8296-0.83 area might give some initial resistance. But if the market stays above 0.8250 after a throwback, there is still upside pressure, espeically with the market seeing a break above the declining trendline. A rally to 0.8344 61.8% retracement of the 0.8420-0.8220 swing, is a valid outlook for a break above 0.8280 and hold above 0.8250 after throwback.
As I conclude this article, the market breaks above 0.8280, so it looks like we will be seeing if this bullish outlook will hold true in the US session.