Rising trendline: The EUR/GBP broke a rising trendline that’s held price action since August. However, the break was weak, and still had another rising trendline from the July low at 0.7756. This is a slower rising trendline. There was also 50% retracement of the 0.7756 – 0.8114 rally, at 0.79345. As we can see in the daily chart, a sharp bullish candle is developing. There is still the rest of the 10/1 US trading session before this candle closes. Friday’s (9/28) price action shows resistance at 0.7990, but today, the EUR/GBP appears to be in a strong rally trying to break above 0.80.
Declining trendline: Above 0.80, the market focuses on a declining trendline again, the one that goes back to 0.9083 2011-high. If the market remains under the declining trendline, the market is still in consolidation. And if the market is able to break below the rising trendline seen in the daily chart, the market is probably focused on the bearish continuation outlook.
As the market gets closer to the convergence of these trendlines, we should be read for directional clues.
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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