Short-term technical outlook on EUR/GBP (Wed 03 Oct)
- After its swift rally of 150 pips within 4 days from its key medium-term pivotal support of 0.8865 (pull-back support of the former descending range resistance from 12 Oct 2017, lower boundary of the medium-term ascending channel from 17 Apr 2018 & Fibonacci projection/retracement cluster), the EUR/GBP has given up all its gains post FOM but managed to hold its losses right at the 0.8865 key support.
- Since yesterday, 02 Oct 2018 European session, the cross pair has started to reverse up and staged a bullish breakout from a minor descending channel resistance in place since the recent 24 Sep 2018 minor swing high. In addition, it has traced out a minor bullish reversal “Inverse Head & Shoulders” with its neckline resistance at 0.8916.
- The key short-term support rests at 0.8880 which is defined by the pull-back support of former descending channel resistance and 61.8% Fibonacci retracement of the recent push up from 0.8858 low of 01 Oct 2018 to today, 03 Oct 2018 current intraday Asian session high of 0.8918.
- The daily RSI oscillator has started to turn up from its key corresponding support at the 40 level while the shorter-term hourly Stochastic oscillator has inched upwards towards its overbought region without any bearish divergence signal. These observations suggest a revival of short-term upside momentum.
Key Levels (1 to 3 days)
Intermediate support: 0.8900
Pivot (key support): 0.8880
Resistances: 0.8995 & 0.9030/9050
Next support: 0.8865 (medium-term pivot)
The EUR/GBP may start to see a minor bullish reversal at this juncture if the 0.8880 key short-term pivotal support holds. A break above 0.8916 is likely to reinforce a potential push up to retest the intermediate resistance at 0.8995 before targeting 0.9030/9050 (medium-term range resistance in place since 12 Oct 2017).
However, failure to hold at 0.8880 negates the bullish tone for a slide to retest the 0.8865 key medium-term pivotal support.
Charts are from eSignal