Forex Technical Update
After finding support above 0.7810, the EUR/GBP has remained in a rising channel. The failure of continuing the bearish trend, or at least testing the 0.7755 low, refocuses the pair to resistance factors, the closest one being the 0.7960 resistance pivot.
The daily chart shows a slightly more aggressive bullish scenario in an ABC correction where C=A. If the 0.7960 resistance can not hold, the EUR/GBP can target the 0.8018 area in this wave equality scenario. Before that, around the 0.80 psychological handle, we will also likely test a declining trendline that 10/27/2011 resistance pivot at 0.8830 with the 2/24/2012 resistance pivot at 0.8492.
There should be resistance in this 0.80-0.8020 area. I forgot to lay out the fibonacci study here, but it should be noted that 61.8% retracement of the 0.8152-0.7756 swing from June through July, is at0.80, making this a confluence of resistance factors. The bullish attempts at the moment are seen as a correction again the bearish trend that started from the 7/1/2011 high of 0.9083. It should be noted that the daily RSI has since been held below 60, with brief moments of violation. This is a result of persistent bearish momentum.
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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