Simple Moving Average(SMA) 50-period (red), 200-period (bold, gray)
RSI-14 with Simple Moving Average 5-period of RSI attached.
Elliott Wave Principles
Market and Price Action (patterns, candlesticks)
Intraday pivots and Intermediate-term support and resistance
Multiple Time-frame Analysis
- The EUR/GBP was not able to hold above 0.85 as anticipated in our recent post on EUR/GBP, looking for a rally after the 3-swings down attempt if 0.8567 breaks. We did not get this signal, and the market invalidated the bullish scenario as the 4H chart shows a bearish momentum breakout int he RSI, not only breaking below 40, but also 30.
- Price action also broke below rising support and 61.8% retracement.
- We are likely in a bearish attempt, as we see today in other euro-crosses.
- The daily chart shows the market now heading towards 0.8340 and possibly lower towards the 0.82 in the short-intermediate term (the 0.8290 low has to be cleared)
- The weekly chart shows the bearish mode intact, and showing a full swing projection towards 0.7550 area. We know however, that the 0.78 area is the 61.8% retracement level and therefore is a more realistic area to anticipate the bearish attempt to find trouble in the intermediate to long term. In this scenario, we should see the RSI in the daily not only break below 40 but also tag 30.
- We should probably short on rallies in the next couple of weeks.
Will the EUR/GBP break lower towards 0.78 in the long intermediate term? We would love to hear what you think.
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Fan Yang CMT
Chief Technical Strategist