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
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.