Featured Trade: EUR/GBP pull backed towards medium term support ahead of UK job data

Watch the key medium-term support of 0.8865 for EUR/GBP

Short-term technical outlook on EUR/GBP (Tues 11 Sep)



Key elements

  • The recent 200+ pips slide seen in the EUR/GBP cross pair from its 28 Aug 2018 high 0.9098 is now coming close to a key medium-term support level of 0.8865.
  • The 0.8665 key medium-term support is defined by the lower boundary of an ascending channel in place since 17 Apr 2018 low, the pull-back support of a former range resistance from 12 Oct 2017 (in dotted green) and a Fibonacci retracement/projection cluster (refer to daily & hourly charts).
  • The recent minor decline from 0.9052 high of 05 Sep 2018 to the 0.8888 current intraday low of 11 Sep 2018 has formed a minor bullish reversal “Descending Wedge” configuration with its upper boundary/resistance now at 0.8932 (refer to hourly chart).
  • The hourly Stochastic oscillator (a momentum indicator) has traced out a bullish divergence signal at its oversold region which indicates that the momentum of its recent slide has started to abate.
  • The next significant short-term resistance stands at the 0.930/9050 zone (the minor swing high area of 05 Sep 2018 and the 76.4% Fibonacci retracement of the current decline from 28 Aug 2018 high to 11 Sep 2018 current intraday low of 0.8888 (refer to hourly chart).

Key Levels (1 to 3 days)

Pivot (key support): 0.8865 (medium-term pivot)

Resistances: 0.8932 & 0.9030/9050

Next support: 0.8700

Conclusion

Therefore, as long as the 0.8865 key medium-term pivotal support holds, the EUR/GBP may see a push up to test 0.8932 and a break above it opens up scope for a potential minor bullish reversal to target the 0.9030/9050 resistance.

However, failure to hold above 0.8865 invalidates the bullish tone for a further decline to test the next support at 0.8700.

Charts are from eSignal



Join our live webinars for the latest analysis and trading ideas. Register now

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.

For further details see our full non-independent research disclaimer and quarterly summary.