Forex Technical Update July 19, 2010 EUR/GBP: Target for Pullback
- Daily and Weekly: Today continues Friday's move, and suggests the rally is a significant pullback since breaking below a triangle seen in the weekly. However we see that maybe it is not a triangle, but has developed into a declining channel.
- The daily chart shows that it has broken through 38.2% retracement without any trouble, and is heading towards 0.86. This is an important area because if the decline since Oct. 2009 is an impulse wave, this would be a wave 4, and should not break above 0.86.
- However, we may just be in a declining channel where we don't have any impulse waves.
- If that is the case, the EUR/GBP can continue a rally that may test the channel resistance area.
- Thus if 0.86 is broken, the market sees next target at 0.8720/0.8740 area (61.8% and 50% retracement).
- Weekly's 50SMA is also near this area.
- The market is very bullish right now, so the 0.8720/40 is the projection, with 0.86 to serve as confirmation.
Fan Yang Currency Analyst Commodity Trading Advisor
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